Aten International Co (宏正自動科技), which offers information technology infrastructure solutions, yesterday offered an optimistic outlook for this quarter as it gradually resumes production in China amid the COVID-19 pandemic.
“While we posted a small NT$25 million [US$829,187] revenue loss in China last month [from a year earlier] due to a halt in production and shipments, the market is starting to recover,” Aten chief financial officer Alex Chen (陳健南) told a quarterly investors’ conference in Taipei.
“We have resumed about 50 percent production this week at our Shenzhen plant, as workers return from quarantine,” Chen said, adding that the company would recover full production by the middle of next month.
Reassuring investors that the company is not low on raw materials, Chen said that Aten has adjusted inventories across its sales channels to ensure steady shipments.
As the Chinese market appears to be stabilizing, Aten’s gross margin this quarter would improve from 61.2 percent last quarter as the company deploys price control tactics, Chen said.
The pandemic might increase market demand as more companies seek to hold conferences online, so Aten has shifted its focus to enterprise solutions for smart meeting rooms, it said.
Aten said that it is to relocate part of its Chinese production — about 60 percent of its overall capacity — to Thailand.
“Since we already own a piece of land in Thailand, that is the most logical choice for us,” Chen said, adding that the company plans to set up manufacturing facilities there by the first quarter of next year.
“We will start out with entry-level products, such as secure KVM [keyboard, video, monitor] switches, which will also help us gain a stronger foothold in the Thai market,” he said.
Asia remains the company’s largest source of revenue, contributing about 48 percent of overall sales last year.
Aten reported that consolidated sales last year declined 6 percent year-on-year to NT$5.03 billion, while net profit fell 55.49 percent to NT$703.29 million, mainly due to a high comparison base the previous year, when the company posted an asset disposal gain after selling its stake in server management specialist Aspeed Technology Inc (信驊).
Aten reported that earnings per share last year were NT$6.05.
The company said that its board of directors on Tuesday approved a proposal to pay a cash dividend of NT$5.3 per common share, representing a payout ratio of 87.6 percent.
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