Molding components maker Concraft Holding Co (康控), which also supplies acoustic components for the iPhone XR, on Wednesday gave an upbeat outlook for this quarter on the back of an improved product mix.
Anticipated popularity of the most affordable new iPhone would likely trigger an upgrade cycle, which would boost acoustic component revenue through the first half of next year, Concraft chief financial officer Joe Huang (黃翹生) told an investors’ conference in Taipei.
The plant could be working overtime through the Lunar New Year holiday in February to satisfy demand, Huang said.
Concraft’s third-quarter sales rose 36.9 percent from the previous quarter to NT$2.01 billion (US$64.85 million), with acoustic components contributing between 60 and 70 percent, followed by automotive components at 10 to 15 percent.
While the company has not yet released its audited results for last quarter, margins and profit are expected to see year-on-year gains this quarter.
Gross margin is expected to rise to between 40 and 50 percent at the end of December from 38.61 percent at the end of June, Huang said, without revealing third-quarter figures.
Huang also downplayed a report by China’s Tianfeng Securities Co Ltd (天風證券) which suggested that Merry Electronics Co (美律), an iPhone speaker supplier, is aiming to increase its own components and cut procurement from Concraft.
“Merry’s move would not affect our acoustic development strategy for the next three years,” Huang said.
It remains to be seen whether Merry could achieve a viable production yield rate, while Concraft would have little trouble switching production capacity to other components, Huang said.
Huang also confirmed that the company has clinched orders for automotive optoelectronics, consisting of camera lenses for South Korean clients and exterior lighting for Chinese electric vehicle makers.
The company would next year begin mass producing and shipping automotive components, which would double revenue contribution from NT$500 million to NT$1 billion, representing 15 percent of its top line at the end of next year.
He gauged automotive order visibility in the next three to five years at about 600 million yuan (US$86.38 million).
However, Huang said that ongoing US-China trade tensions have dampened procurement appetite among its customers, while Apple Inc is likely to demand price cuts ahead.
Despite high preorder demand for the iPhone XR, shares in Concraft yesterday tumbled by the daily 10 percent limit to NT$141.5, while Merry dropped 4.32 percent to NT$155.
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