Taiflex Scientific Co (台虹科技), which manufactures flexible printed circuit boards for mobile phones, on Tuesday gave a conservative guidance for this quarter, with revenue likely to fall 7.78 percent to NT$2.2 billion (US$71.19 million).
The forecast would represent a nearly 60 percent pickup from the previous quarter.
Chinese clients are supplying the demand, general manager Yen Chih-ming (顏志明) said in an earnings call, adding that the company plans to end its solar energy business entirely at the end of this quarter.
While orders from US clients fell, orders from Huawei Technologies Co Ltd (華為), Oppo Mobile Telecommunications Corp (歐珀) and Vivo Communication Technology Co (維沃) have increased, Yen said.
Consequently, Chinese clients have gained importance, accounting for 55 percent of first-quarter revenue, compared with 30 percent a year earlier, company data showed.
US clients generated 35 percent last quarter, compared with 60 percent a year earlier, with automobile electronics manufacturers making up the remaining share.
Net losses reached NT$7.17 million, down from NT$180.85 million a quarter earlier and NT$96.94 million a year earlier.
Losses per share were NT$0.03, reversing from earnings per share of NT$0.86 a quarter earlier.
Gross margin fell to 11.43 percent, compared with 18.21 percent a quarter earlier and 19.71 percent a year earlier, the company said, blaming the poor showing on weak mobile phone sales and the exit from the solar energy business.
Revenue dropped 43.04 percent quarter-on-quarter, or 31.35 percent year-on-year, to NT$1.37 billion.
Sales of electronic materials dropped 20.7 percent year-on-year.
Sales of smartphones released last year disappointed and upstream component suppliers felt the pinch, Yen said.
The firm is to divest of NT$50 million in solar energy-related products this quarter and there would be no revenue contribution from the solar energy business from next quarter, he said.
“There are no bad debts among the accounts receivable in the solar energy business, so investors do not have to worry,” Yen said.
Taiflex’s new factory in Rudong County in China’s Jiangsu Province is expected to be completed next quarter and contribute to earnings next year, he said.
The company would adjust its product portfolio in the short term to maintain steady revenue, Yen said.
It is to focus on developing more high-frequency materials and white, brown or transparent cover layers to make products more competitive from next year, he said.
The company’s Modified PI used in mobile phone antennas is ready for shipment, Yen said, adding that liquid crystal polymer, another material for making antennas, would contribute to revenue next year.
Taiflex shares on Tuesday remained at NT$39.7 in Taipei trading.
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