TPK Holding Co Ltd (宸鴻), which supplies touch modules for Apple Inc’s smartwatches and iPads, yesterday reported profits for last quarter, the fourth consecutive profitable quarter, as customers’ robust demand for tablet panel modules offset weakness in smartphone demand.
TPK’s revenue last quarter rose 4.6 percent quarter-on-quarter to NT$22.41 billion (US$741.4 million), thanks to 19 percent quarterly growth in shipments of touch panel modules for tablets, the company said.
The result means the company is on track to hit its target of remaining profitable throughout the year, as the second quarter is usually the most challenging, chief executive Michael Chung (鍾依華) told an investors’ teleconference from Taipei.
Photo: Chen Mei-ing, Taipei Times
“As more new products from our customers are set to hit the market in the third and fourth quarters, we believe the company will also reach the goal of posting annual revenue growth in each quarter of the second half this year,” Chung said.
“The company’s profits also rose quarter-on-quarter in the first half, given satisfying yield rates and better factory utilization,” he added.
Net profit improved to NT$327 million in the three-month period ending June 30, compared with a loss of NT$2.5 billion in the same period last year, when TPK failed to improve yield rates on touch panels used in wearable devices to a profitable level.
On a quarterly basis, net profit plunged 47 percent from NT$616 million when excluding massive asset disposal gains of NT$820 million.
Gross margin improved to 6.7 percent, compared with 5.6 percent a quarter earlier and minus 9.3 percent a year earlier.
TPK expects growth momentum to accelerate this quarter as the effect of new product launches by major customers would be amplified in the upcoming peak season.
“We are seeing customers boost shipments in the second half after a small volume of new devices reached the stores at the end of the second quarter,” chief financial officer Freddie Liu (劉詩亮) said.
“We believe the 25 percent to 30 percent quarterly growth forecast by some analysts should be achievable in the third quarter,” he added.
The company’s revenue of NT$9.58 billion for last month is a good indicator of a revenue uptrend, given that the figure represented month-on-month growth of 8.9 percent from NT$8.8 billion, Liu said.
TPK said it is on track to form a strategic partnership with Chinese touchpanel maker O-film Tech Co (歐菲光) via cross-shareholding, seeking to ease investors’ concern that China’s curbs on capital outflows could weigh on their cooperaton.
In March, TPK’s board approved the sale of a 5.46 percent stake to O-film for NT$1.8 billion.
The company also plans to invest as much as NT$900 million in purchasing O-film shares at 40.34 yuan per share.
Despite the delay in share purchases, TPK said it would continue to push for the creation of a joint venture as planned.
The companies are to sign an agreement within a month to facilitate the formation of the joint venture in China, in pursuit of business opportunities in touch modules used in mobile phones, tablets and cars, Liu said.
“The companies’ intent to provide one-stop-shop solutions for customers through the strategic partnerships is intact,” Liu said.
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