Higher deployment demand for 400 gigabit (Gb) switches and telecoms’ access solutions, such as 100Gb switches, software-defined wide area network (SD-WAN) products and accelerator cards for edge computing, Accton Technology Corp (智邦科技) could generate robust sales growth for this year, Yuanta Securities Investment Consulting Co (元大投顧) said on Friday.
The networking equipment maker’s sales are forecast to increase 28 percent to NT$55 billion (US$1.78 billion) this year, hitting a record after growing 18.23 percent to NT$43.09 billion last year, Yuanta said in a note after Accton held an investors’ conference earlier on Friday.
Accton posted record sales of NT$5.92 billion for last month, up 37.02 percent year-on-year due to seasonal demand and contribution from new production lines in Miaoli County’s Jhunan Township (竹南).
In the first eight months of this year, cumulative sales were NT$35.41 billion, an increase of 34.97 percent from the same period last year, company data showed.
“Based on feedback from distribution channels, Accton’s Septemeber sales would be lower than August’s level, but its third-quarter sales are likely to reach a new high,” with growth momentum mainly coming from 100Gb high-density switches, accelerator cards and edge computing SD-WAN solutions, Yuanta analyst Wang Deng-cheng (王登城) said in the note.
“As for fourth-quarter sales, it remains to be seen whether sales would continue to trend upward,” Wang said, adding that gross margin for the second half of the year is likely to stay at the second-quarter level of 20.9 percent.
Overall, telecom devices would remain a major driver for sales this year, while Accton began shipping small numbers of 400Gb switches in the second half of this year, Yuanta said.
The company’s new 400Gb products would enter mass production next year, it said.
Accton’s major product portfolio includes switches, networking applications, access solutions, wireless equipment and broadband access solutions.
To minimize the risks stemming from the US-China trade dispute, Accton is accelerating capacity expansion in Taiwan. The Hsinchu-based company has 27 surface-mount technology production lines in Taiwan and China, including three in Hsinchu, five in Jhunan and 19 in Shenzhen in China’s Guangdong Province, according to documents posted on its Web site following the investors’ conference.
Accton made NT$2.14 billion in net profit in the first half of the year, up 62 percent from NT$1.32 billion a year earlier, or earnings per share (EPS) of NT$3.85, a company financial statement showed.
Given the stable outlook for orders, the market’s consensus estimate is that the company’s net profit this year is to grow 71 percent year-on-year to NT$5.04 billion, with EPS of NT$9, a record, Yuanta said.
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