Sporton International Inc (耕興), which provides testing services for handsets and telecommunications equipment, yesterday said that it expects strong revenue growth in the second half of this year on the back of affordable 5G phones and customer premise equipment (CPE) wireless routers.
The firm has restored its testing capacity in its Taiwanese and Chinese laboratories back to the levels achieved before the COVID-19 pandemic, Sporton said, while its US laboratory reopened on Monday last week after infections began to ebb.
The company, based in New Taipei City’s Sijhih District (汐止), said that it has an order backlog through next quarter.
“We are optimistic about this year,” Sporton vice chairman Peter Wang (王新添) told investors in a videoconference arranged by the Taipei Exchange. “Sporton usually registers rapid growth in revenue and gross margin when the industry migrates to next-generation technology, as new devices need to be certified before being shipped.”
“This year as a whole, Sporton is set to deliver amazing growth in revenue, ending [tepid] growth over the past three to four years,” he said.
Sporton expects orders for 5G new radio testing, mostly for handsets and CPE routers, to grow more than 400 percent year-on-year, Wang said, citing the rapid global adoption of 5G devices.
The company counts Chinese smartphone makers Huawei Technologies Co (華為) and Xiaomi Corp (小米) among its clients.
The 5G penetration rate is to accelerate in the second half of this year when Qualcomm Inc and MediaTek Inc (聯發科) release less expensive 5G chips for smartphones and CPE routers, Wang said.
The COVID-19 pandemic has not delayed the deployment of 5G technology in China, the US and Australia, he said.
Sporton is also providing testing services for new Wi-Fi 6 technology-enabled networking devices, the company said.
To cope with rising customer demand, Sporton said that it budgeted NT$60 million (US$2 million) in capital expenditure for last quarter and NT$100 million for the current quarter.
Sporton posted a net profit of NT$152.363 million in the first quarter, up 0.66 percent from NT$151.363 million in the same period last year.
Earnings per share rose to NT$1.65 from NT$1.64.
Revenue climbed 4.16 percent year-on-year to NT$736.7 million, but gross margin slid slightly to 43.5 percent from 43.55 percent the previous year.
The company’s board of directors has proposed distributing a cash dividend of NT$6 per common share, representing a 82.53 percent payout ratio based on the company’s earnings per share of NT$7.27 last year.
The proposal is subject to shareholders’ approval at the company’s annual general meeting on June 12.
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