Ta Liang Technology Co (大量科技), a maker of drilling and routing machines for printed circuit boards (PCB), reported that net income plunged 55.16 percent to NT$43.5 million (US$1.41 million) in the first quarter, down from NT$97.02 million a year earlier as the US-China trade dispute postponed customers’ capacity expansion.
First-quarter revenue slumped 53.84 percent year-on-year to NT$446.72 million, with Taiwanese customers’ sales contribution slumping 89.31 percent to NT$49.95 million and Chinese customers’ contribution falling 21.65 percent to NT$321.15 million, company data showed.
Earnings per share (EPS) dropped from NT$1.21 to NT$0.55 and gross margin declined from 25.25 percent to 24.61 percent over the period, the data showed.
Ta Liang manufactures precision tools and equipment essential for making PCBs, which are used in mobile phones and other electronics.
The PCB tools business had been on the rise for the past three years, in line with high demand for mobile phones, but sales have dwindled since the second half of last year as companies adjusted business strategies to avoid exporting products from China, president Jerry Chen (陳尚書) told investors in an online conference on Friday.
“Last quarter we were at the bottom, but we expect our sales to grow gradually this year, as Southeast Asian customers have increased their orders since last quarter and demand from Chinese customers also climbed last month,” Chen said.
Growth momentum for this year would mainly come from the Chinese market, as customers aim to advance their PCB businesses by acquiring high-end equipment, such as computer numerically controlled (CNC) machine tools produced by Ta Liang, he said.
“This might affect the performance of Taiwanese companies,” he said.
The company would see revenue contribution from semiconductor business begin later this year, as it has developed 10 quality control machines for wafers, Chen said.
In related news, Topoint Technology Co (尖點科技), a manufacturer and supplier of precision processing tools for PCBs, reported that first-quarter net income plunged 49.46 percent year-on-year to NT$30.81 million due to inventory adjustments by customers.
EPS dropped from NT$0.38 to NT$0.22 and gross margin decreased by 3.65 percentage points to 23.38 percent over the period, while revenue fell 16.06 percent to NT$655.20 million, compared with NT$780.54 million a year earlier.
“Last quarter was a low season for precision tool business, as customers were adjusting inventories,” Topoint told a teleconference on Thursday.
Despite the earnings and sales declines, the company said it is positive about this quarter after revenue increased 11.9 percent monthly to NT$251.23 million last month.
The company said that orders for drilling tools and services this quarter have rebounded, while sales of cutting tools are expected to pick up in the third quarter.
Ta Liang shares closed up 0.12 percent at NT$40.55 on Friday, while Topoint closed down 1.53 percent at NT$19.3.
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