Quartz crystal components maker TXC Corp (台灣晶技) yesterday said that its gross margin is expected to continue improving this year on the back of a better product mix.
The firm, which designs, manufactures and sells frequency-control crystal components, said growth momentum would continue as long as new applications emerge.
“We have seen demand grow in the Internet of Things, the Vehicle-to-Everything and the wearable market, which could expand our business opportunities,” president Peter Lin (林萬興) told investors.
TXC’s products are used in the fields of networking, mobile communication, mobile computing, automotive, lighting and home automation.
Company officials said they expect revenue contributions from networking and mobile communication segments to account for 37 percent and 25 percent of its total revenue this year respectively, up 1 percentage point from last year.
The contribution from automotive applications is forecast to rise to 6 percent of total revenue from 4 percent last year, while its computing segment sales might see a 3 percentage point drop to 16 percent from a year ago.
The company’s sensors are expected to account for 8 percent of revenue, compared with 2 percent last year, while temperature compensated crystal oscillators (TCXO) would increase from 9 percent to 12 percent, it said.
Officials said capital expenditure is set at NT$750 million (US$23.2 million) this year, including NT$500 million used to expand sensor production lines and TCXO in Taiwan, NT$150 million for its plant in Ningbo, China, and NT$100 million for its plant in Chongqing, China.
Consolidated revenue dropped 1.22 percent annually in the first quarter to NT$2.11 billion, while gross margin increased from 25 percent to 28.9 percent, company data showed.
TXC’s net profit in the first quarter remained flat from a year earlier, at NT$226.17 million, with earnings per share of NT$0.73, due to foreign-exchange losses.
“The impact from foreign-exchange rates have fluctuated in recent years,” Lin said, adding that there is no hedging strategy that can eliminate foreign-exchange risks completely.
TXC booked about NT$100 million in foreign-exchange gains last year, but NT$40 million in losses in the first quarter of this year.
Product prices might continue to drop this quarter, but revenue and gross margin are expected to grow thanks to early preparation of products to cope with market trends, Lin said.
The impact of Apple Inc’s conservative outlook on TXC would not be big because it has shifted products to its Chinese clients, while Apple’s orders have contributed less than 10 percent of total sales, Lin said.
In a separate announcement, the company said it would issue a cash dividend of NT$2.5 per share, based on its earnings per share of NT$3.03 last year. That translates into a payout ratio of 82.51 percent, higher than last year’s 77.88 percent.
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