Wistron Corp (緯創), a leading Taiwanese computer and peripheral original design manufacturer (ODM), yesterday projected shipments of 21 million notebooks by the end of this year, up from 11.5 million units last year.
The company also wants to diversify its product line by reducing its notebook exposure, it said at a meeting hosted by the Taiwan Stock Exchange Corp (TSE, 台灣證交所).
“Currently, three-quarters of Wistron’s revenue is derived from its notebook business,” Mike Liang (梁惠明), senior manager of investor relations at Wistron, said at the meeting yesterday. “Going forward, we hope to diversify our product line and bring down the notebook contribution to less than 50 percent in three years. This would help even out our revenue stream.”
As soon as the end of next year, investors will start to see notebook contribution falling below 70 percent, Liang said.
This year, Wistron missed out on the flourishing netbook market because it had deployed all its resources towards making traditional notebooks at the beginning of the year. But the company does acknowledge the rapid growth of the segment, he said.
Liang described notebook demand as coming mostly from consumers, rather than corporate entities and says that the notebook market is represented by an “L” shape with the majority of shoppers going for the low-end and low-priced notebooks or netbooks.
Next year Wistron will definitely join in netbook shipments, Liang said.
“Since Wistron is already in the business of manufacturing notebooks, transitioning into netbook manufacturing will not be difficult. Also there is a better gross margin in the netbook segment,” he said.
Incorporating netbooks into the notebook category, a method used by the US International Trade Commission (ITC), Wistron forecasts shipments of 25 million to 28 million units of notebooks next year, which is a growth of between 20 percent and 30 percent from this year. This figure includes a netbook component of between 1 million to 2 million units.
Looking forward, Liang said Wistron reaffirmed its second half margin projection of 5.5 percent to 6 percent, the same as previously expressed by Simon Lin (林憲銘), Wistron’s chairman and chief executive officer. Liang said that in the second half, operating margin would be around 2 percent.
While third quarter numbers are being finalized, Liang anticipated a 30 percent quarter-on-quarter growth in notebook shipment figures.
“There is little visibility to the fourth quarter so we are conservatively optimistic,” he said.
Wistron closed the day at NT$39.60, an increase of NT$1.90 or 5.04 percent. The stock is down 34.3 percent on the year.
Wistron reported a first-half gross profit increase of 50 percent to NT$11.01 billion (US$350 million) in August.
Consolidated first-half revenue came in at NT$178.89 billion, an increase of 62 percent as operating income reached NT$3.63 billion, a 27 percent increase. Earnings before tax and after tax were NT$3.87 billion and NT$3.11 billion respectively, producing earnings per share of NT$2.55.
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