Telecom equipment vendor Sercomm Corp (中磊) yesterday said its revenue would continue to grow this year, benefiting from rising demand for home gateways in Europe, North America and China.
The company said that revenue growth would also come from increasing Internet of Things (IoT) applications used in smart home devices and higher demand for small-cell base stations.
Sercomm designs and manufactures broadband networking devices. The company supplies small-cell base stations to telecom operators, including Chunghwa Telecom Co (中華電信) and Far EasTone Telecommunications Co (遠傳電信) in Taiwan, and China Mobile Ltd (中國移動) across the Taiwan Strait.
“We are optimistic about this year. This year will be a better period than last year,” company president James Wang (王煒) told a media gathering.
The uptake of ultra-resolution 4K TV is one of the reasons driving demand for bigger bandwidth to deliver content, and thereby demand for home gateway and Wi-Fi devices, Wang said.
Home gateway, which facilitates connection between a local area network and a wide area network, is the biggest revenue source for Sercomm, accounting for a more than 60 percent share.
Daiwa Capital Markets analyst Kylie Huang (黃奎毓) said this year should be another good year for Sercomm after posting strong revenue growth last year, forecasting that the firm would grow its revenue by a double digit percentage this year.
Huang attributed the growth to increasing adoption of Internet protocol (IP) cameras and small cells, as well as new orders for integrated access devices.
Wang said that slowing economic growth in China would hardly affect the company’s business as broadband demand and 4G deployment continue to increase. Chinese business made up about 25 percent of Sercomm’s revenue.
Last year, Sercomm hit its target of making US$1 billion in annual revenue — one year ahead of schedule.
On a consolidated basis, revenue soared 50 percent to a record NT$35 billion (US$1.04 billion) last year after shipping 28 million units of broadband equipment, the company said.
Wang said the company should be able to maintain high operating margins this year.
The company’s operating margin climbed to 6 percent during the third quarter last year from 4.3 percent in the prior quarter, thanks to an improved product mix, increased automation and scale benefits.
Sercomm has not released last year’s earnings, but the company said most employees based in Taiwan would receive an average of 20 months of their monthly salary including bonuses.
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