Flexible printed circuit board and handset keypad maker Ichia Technologies Inc (毅嘉科技) has continued to be rocked by China’s tougher environmental regulations, as the company was dealt fresh penalties by local authorities in Suzhou.
Ichia’s production facility in Suzhou was fined 1.57 million yuan (US$235,354) for industrial water pollution, the company said in a filing with the Taiwan Stock Exchange.
The penalties came after the company announced that portions of its Suzhou production lines were allowed to go back online on Friday last week and on Monday, after Suzhou authorities ordered a full shutdown of the facility at the end of last month.
SALES DROP
The production disruption at the Suzhou plant, which contributes about 80 percent to its total revenue, has resulted in a 10 percent sequential and annual decline in sales last month to NT$537 million, Ichia said.
During an investors’ conference yesterday, Ichia general manager Larry Sun (孫永祥) pledged that the company would raise its commitment toward meeting Chinese environmental regulations.
The company would mitigate risks of production disruptions by spending US$1 million to expand its capacity in New Taipei City’s Linkou District (林口), he said.
Despite the disruptions, the company gave an optimistic outlook for the second half of the year, as the industry enters its high season.
Sales would be boosted by rising shipments of niche market products for data centers, as well as optical communication and automotive applications, it said..
XIAOMI LINK
Industry observers have said that Ichia and other suppliers to Xiaomi Corp (小米) came under scrutiny as the Chinese smartphone and smart appliances maker launched its initial public offering on Monday.
Ichia has said that while it does not sell products directly to Xiaomi, its other customers might be part of the Chinese brand’s supply chain.
Ichia posted a pre-tax income of NT$97 million (US$3.18 million) last quarter, or NT$0.32 per share. That compares with a net loss of NT$108 million in the first half.
Second-quarter revenue rose 12.3 percent from the previous quarter to NT$1.79 billion, with gross margin improving 5 percentage points to 7 percent over the period, the company said.
Ichia shares rose 2.05 percent to close at NT$17.40 in Taipei trading yesterday.
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