Accelerating 5G deployment worldwide and production allocation to Taiwan and the Philippines amid a US-China trade dispute would help fuel growth momentum this year, telecom equipment maker Sercomm Corp (中磊) said.
The company earlier this quarter launched a new manufacturing site in the Philippines and last quarter more than doubled annual capacity at a plant in Miaoli County’s Jhunan Township (竹南).
The Jhunan plant is now fully utilized, Sercomm said.
To circumvent rising US tariffs on Chinese goods, the company said that it aims to supply its US clients with products manufactured entirely outside of China beginning this quarter.
Based on Sercomm’s allocation plan, its Chinese plant in Suzhou, China, would account for a smaller share — 60 percent of the company’s total production, compared with 90 percent last year — while the Jhunan and Philippine plants would contribute 20 percent each.
However, a labor shortage and rigid labor laws have limited capacity expansion in Taiwan, Sercomm said.
As the world ushers in the 5G and Internet of things era, the company expects revenue to regain growth momentum this year, following a plunge of 14 percent last year to NT$33.39 billion (US$1.06 billion), compared with NT$38.6 billion in 2017.
The company is positive about its revenue outlook, thanks to the rollout of more mobile Internet of Things networks, smart energy, smart healthcare and cloud-enabled applications, as well as 5G small-cell base stations, Sercomm chairman Paul Wang (王伯元) said in a statement on Wednesday.
Its expansion into fast-growing emerging markets such as Latin America, India and Southeast Asia would also drive up sales, he said.
Sercomm shareholders on Wednesday approved a proposal to distribute a cash dividend of NT$2.5 per share, representing a payout ratio of 75 percent based on last year’s earnings per share of NT$3.32.
That represented a dividend yield of 3.71 percent, compared with the stock’s closing price of NT$67.3 in Taipei trading yesterday.
Shareholders also gave the go-ahead to a fundraising plan to issue up to 50 million common shares via a private placement or offering NT$3 billion in corporate bonds at home or overseas.
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