Zhen Ding Technology Holding Ltd (臻鼎), the nation’s leading flexible printed circuit board (PCB) supplier, reported that its annual earnings for last year exceeded its paid-in capital, with earnings per share (EPS) reaching a record NT$10.5.
The stronger-than-expected results came as the company’s net income attributable to the parent company reached NT$8.45 billion (US$274.1 million) last year, up 63.34 percent from NT$5.17 billion in 2017.
Last year’s revenue increased 7.94 percent annually to NT$117.91 billion, while gross margin improved by 5.77 percentage points to 22.1 percent and operating margin rose by 4.66 percentage points to 12.59 percent, Zhen Ding said in a financial statement released on Friday last week.
The company said that its board of directors had proposed the distribution of a cash dividend of NT$5 per common share, representing a payout ratio of 47.62 percent.
Zhen Ding, about 38 percent held by Hon Hai Precision Industry Co (鴻海精密), was the world’s largest PCB maker last year in terms of revenue, ahead of Japan’s Nippon Mektron Ltd and US-based TTM Technologies Inc, according to market information advisory supplier Prismark.
Cayman Islands-incorporated Zhen Ding, which is part of Apple Inc’s supply chain, saw its revenue grow 8.9 percent last year in US dollar terms, higher than the global average of 6 percent, the company said at its quarterly earnings conference on Friday, citing Prismark’s statistics.
Apart from flexible PCBs, the company’s product portfolio includes rigid PCBs, high-density interconnection boards, automotive boards and other products.
Zhen Ding chairman Charles Shen (沈慶芳) said at the earnings conference that revenue and profit would continue to grow this year, driven by new products and new customers, despite difficult market conditions due to the economic slowdown, inventory adjustment and trade uncertainties that resulted in cumulative revenue in the first two months dropping 29.65 percent year-on-year to NT$12.11 billion.
Shen said he expected revenue to gradually improve in the next few quarters.
“Sales growth momentum should start to accelerate in the third quarter,” the Chinese-language Liberty Times (the Taipei Times’ sister newspaper) quoted Shen as saying on Saturday.
The global PCB market over the next five years would be driven by new technological applications in the 5G base station, smart home, smart city and autonomous driving sectors, Shen said.
With the commercial launch of 5G applications likely in 2022, Zhen Ding is involved in the development of antenna arrays, flexible PCB antennas, radio frequency modules and flexible PCB antennas with integrated transmission lines, he said.
There is speculation about the antenna design changes for new iPhones by Apple due to wireless technology upgrades and cost-saving considerations, but the final specification and supplier’s allocation have yet to be decided by the US technology giant.
However, Zhen Ding would benefit from the high-speed, high-frequency antenna migration trend, analysts said.
On Friday, shares of Zeng Ding rose 2.24 percent to close at NT$95.7, while the broader market edged up 0.99 percent.
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