Yageo Corp (國巨), the world’s biggest supplier of chip resistors, saw its shares fall by 8.61 percent yesterday, despite posting another record-breaking quarterly net profit as it hiked its prices due to supply constraints.
In the quarter that ended on March 31, Yageo made NT$4.26 billion (US$144 million), which was more than the company’s share capital of NT$3.51 billion. That represented a 4.3 times increase from NT$818.4 million in the first quarter of last year.
On a quarterly basis, net profit jumped 40 percent from NT$3.02 billion.
Earnings per share surged to NT$12.15 last quarter, compared with NT$1.62 a year earlier and NT$8.62 the previous quarter.
Gross margin climbed to a record high of 51.4 percent last quarter, mainly driven by rising contributions from high-end products for cars and industrial devices.
A persistent tight supply of multilayer ceramic capacitors (MLCC) and chip resistors also helped, Yageo said in a company statement on Tuesday.
The firm’s figures for last quarter beat some analysts’ expectations.
First Capital Management Inc (第一金投顧) yesterday said that Yageo’s gross margin beat its estimate of 46 percent and its earnings per share were also higher than the NT$10.13 it anticipated.
“The significant increase in last quarter’s net profit is primarily attributable to the newly unveiled pricing scheme for MLCC,” First Capital said in a research note.
MLCC accounted for 60 percent of Yageo’s revenue totaling NT$11.02 billion in the first quarter of this year, delivering a gross margin of about 60 percent, the investment consultancy said.
First Capital raised its revenue forecast for Yageo to NT$51.8 billion from NT$47.9 billion, in anticipation that the supply crunch would worsen after Japan’s Kyocera Corp announced its decision to stop supplying standard-type MLCC, it said.
This would prompt Yageo to start a new round of price hikes later this year, it added.
Yageo shares dropped to NT$584 yesterday in Taipei trading, but they have rallied about 65 percent since Jan. 2, when the stock closed at NT$354.
The firm is expected to boost capacity by between 25 and 30 percent this year to cope with robust demand, Taishin Securities Investment Advisory Co (台新投顧) said.
“The capacity expansion should help increase Yageo’s revenue this year,” Taishin Securities Investment Advisory said in a research note yesterday. “We expect supply of passive components to be tight during the second half of this year based on information from the supply chain.”
The investment advisory expects Yageo to make NT$49.63 billion in revenue this year, representing year-on-year growth of about 54 percent.
Yageo last month said it spent NT$12 billion in the final quarter of last year to expand its capacity to cope with rising demand.
Given its rosy profit outlook, Taishin Securities Investment Advisory and First Capital raised the target price of Yageo to NT$720 and NT$756, respectively, until December.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in