Industrial cooling fan maker Sun Max Tech Ltd (動力) is expected to benefit from cryptocurrency mining in the first half of this year and gaming-related demand in the second half, local online news outlet investor.com reported yesterday, quoting Sun Max chairman Vincent Hsu (許文昉).
As raw material costs and foreign exchange rates appear to be relatively stable this year, and the company is not expected to book any one-time charges, profitability is likely to improve from last year, Hsu was quoted as saying.
Cayman Islands-registered Sun Max last week reported a less-than-expected 52 percent decline in net profit for last year, which it attributed to the appreciating New Taiwan dollar and rising raw material costs, as well as the issuance of 2.635 million new shares in preparation for its debut on a local market late last year and more than NT$12 million (US$411,480) in charges related to the relocation of a factory.
Net profit last year decreased 42 percent annually to NT$86 million, with earnings per share dropping 52 percent from NT$8.86 to NT$4.26, company data showed.
The results were less than the NT$106 million in net profit and earnings per share of NT$4.45 forecast in a poll of analysts by Bloomberg.
The company’s full-year revenue rose 10 percent to NT$1.29 billion from a year earlier, with gross margin falling 5 percentage points to 27 percent, the data showed.
Sun Max’s board has proposed a cash dividend of NT$2 per share, translating to a payout ratio of 46.95 percent.
The firm’s cooling fan business focuses on the gaming segment, with graphics card cooling kits and other gaming-related products for both desktop and notebook computers accounting for 82.5 percent of overall sales last year, the data showed, indicating that the firm is benefiting from the booming gaming industry.
Over the past few years, the company has developed new heat dissipation products for the automotive, home appliance, communications network and industrial equipment sectors, eyeing new growth drivers.
Its clients include Micro-Star International Co (微星), Asustek Computer Inc (華碩), Gigabyte Technology Co (技嘉) and EVGA Corp — major suppliers of graphics cards using Nvidia Corp chips.
Sun Max expects an emerging gaming trend to continue boosting demand for gaming-related products this year, with Chinese-language local media saying that Nvidia’s launch of its new Volta family of graphics processing units — a major upgrade from the previous Pascal family, with a 50 percent improvement in performance — in the second half of the year will likely be a major driving force for sales growth.
Sun Max shares yesterday ended 1.88 percent lower at NT$88.8 in Taipei trading.
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