Premier Image Technology Corp (普立爾), the country's largest digital camera maker, yesterday remained cautious about its third-quarter performance, citing market demand that was slower than expected and overstocking problems.
"We have seen some inventory build-up at the client end following lower-than-expected market demand for digital cameras in the second quarter," Premier's President Cliff Liu (
"The industry seemed to be too optimistic at the beginning of this year," Liu said.
Premier Image is planning to revise its sales forecast for the third quarter and even the second half of this year, Liu said, but he shied away from making projections yesterday.
But the inventory issue should be sorted out by the end of this quarter, he said.
Premier posted unaudited pre-tax income of NT$720 million for the first half of this year on NT$10.69 billion of revenue.
That represents an improvement over the NT$700 million in earnings on revenue of NT$8.97 billion that was posted a year ago.
The company shipped 1.9 million units over the first half of the year.
Downward Revision
But due to a slump in demand, the company has revised downward its annual sales target for the year to 5.5 million units from the 6 million units it had predicted earlier this year.
"The last half does not look good for digital camera makers," said one analyst, who spoke on condition of anonymity.
The market will remain flat, as consumer demand has been filled previously, the analyst said.
Even so, Premier Image, which saw gross margin of 12.29 percent for the first half, said it would not sacrifice profit in pursuit of higher shipments.
"Quality and control of core technology is essential [for constant development]," Liu said, we will focus on compact products or those of resolution over 5 mega-pixels.
Projector Sector
Meanwhile, the digital camera maker reported it had made inroads into the projector sector, part of a move to diversify its product lineup.
"As the digital camera industry becomes increasingly mature, diversification is necessary for local makers," the analyst said.
It's too early to say whether Premier's efforts will pay off, the analyst said.
The analyst added that the new product will not have a significant impact until it reaches 10 percent of revenue.
Currently the product contributes 3 percent. Premier Image is scheduled to ship over 50,000 projectors this year.
The company expects the number to rise five to seven-fold next year, in light of the fast-expanding projector market, with a projected compound annual growth rate of over 30 percent, Liu said.
To counter the slowdown in the digital camera sector, the company will also focus on manufacturing advanced camera modules for mobile phones with a resolution of 1.3 mega-pixels and 2.1 mega-pixels, as well as key optical components like lenses, he said.
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