Synnex Technology International Corp (聯強), Asia’s largest distributor of information technology (IT) products and electronic components, last week posted NT$105.33 billion (US$3.41 billion) in third-quarter revenue, an annual increase of 4.79 percent and the company’s second-highest quarterly figure.
“Although numerous factors affected the market, including a trade war, US interest rate hikes and currency depreciation in Asia, Synnex continued to increase its market shares due to its aggressive investment in new fields of business,” the company said in a statement on Monday last week.
“All subsidiaries of the Synnex group performed stably in the third quarter. Among them, China and Indonesia — in spite of the trade war and currency depreciation factors — still showed significant [sales] growth of 18 percent and 23 percent respectively” from the same period last year, the company said.
The company’s product breakdown showed that revenue from information technology was 9 percent higher than in the same period last year, reaching NT$62.6 billion, the highest in the company’s history, Synnex said.
Growth in the IT business was mainly driven by increasing demand in the commercial market, including data centers, Internet security and cloud services, as well as the booming e-sports business, the company said.
Sales of telecommunication and consumer products also grew by 16 percent and 9 percent respectively from the same period last year, it said.
In a note to clients, Jih Sun Securities Investment Consulting Co (日盛投顧) said that Synnex’s revenue last quarter met its forecast and matched market expectations that peak-season demand could boost sales.
“This reflects an industry trend that top-tier distributors like Synnex will continue to either obtain direct business from brand customers, or gain market share from small and mid-sized peers, as the industry is consolidating,” Jih Sun analyst Simon Lu (呂金源) said on Tuesday.
However, annual growth in third-quarter revenue was lower than the 12.56 percent annual increase seen in the previous quarter, an indication of slowing growth ahead, Lu said.
“Despite the US-China trade tensions, we have not seen an obvious impact on market demand for computers, communications and consumer electronics from the trade dispute for the time being,” Lu said. “It remains to be seen what kinds of after-effects the company will face in the future.”
Although the market still faces numerous downside risks, Synnex gave a positive outlook for this quarter, saying it expects revenue to climb further on launches of new products by global brands, while enterprises and governments around the world continue to invest in IT, and the company explores new products, new markets and new channels.
In the first nine months, Synnex’s cumulative revenue increased 10.77 percent annually to NT$284.9 billion and Jih Sun said that revenue for the full year could rise 10.6 percent annually to a record NT$402.7 billion.
Net income is forecast to expand 19.9 percent year-on-year to NT$7.33 billion this year, with earnings per share of NT$4.4, up from NT$3.67 last year, Jih Sun said.
Synnex shares closed at NT$34 in Taipei trading on Friday. The stock has underperformed the benchmark TAIEX by about 11 percent in the year to date.
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