Chilisin Electronics Corp (奇力新), the nation’s largest power inductor manufacturer, would continue to benefit from steady demand for inductor components due to the work-from-home economy, while high-margin molding chokes and low-temperature cofired ceramic (LTCC) components are expected to become new revenue drivers, analysts said.
The firm’s cumulative sales rose 9.56 percent year-on-year to NT$15.91 billion (US$558.1 billion) in the first 11 months of last year, as persistent demand for laptops, Chromebooks, smartphones, gaming devices and servers during the COVID-19 pandemic boosted Chilisin’s shipments of mini-molding chokes, high-frequency chip inductors and LTCC components.
The average consumption of LTCC components in 5G smartphones would increase to 10 to 15 units per phone, three times that required for 4G handsets, while the average consumption of inductors would increase from 120 to 180 for each mid-level smartphone and rise from 120 to 180 in high-end models, analysts said.
Photo: Chang Hui-wen, Taipei Times
However, Chilisin’s announcement last month that it would spin off chip resistor maker Ralec Electronic Corp (旺詮) and acquire networking transformer supplier Bothhand Enterprise Inc (帛漢) would result in the company’s revenue dropping about NT$2 billion this year, they said.
“Ralec has posted annual sales of about NT$4 billion, with gross margins of between 25 and 30 percent, while Bothhand has posted sales of NT$2 billion to NT$2.2 billion per year, with gross margin of between 30 and 35 percent,” Yuanta Securities Investment Consulting Co (元大投顧) analysts Calvin Wei (魏建發) and Samantha Chao (趙思涵) said in a research note on Dec. 25.
The deal — with Chilisin acquiring 100 percent shares of Bothhand for NT$2.8 billion — would hurt Chilisin’s revenue outlook in the short term but benefit its operations in the long term, they said.
The transaction is expected to be completed by the end of this month, Chilisin said on Dec. 23.
Yuanta has retained its “buy” rating on Chilisin with a target share price of NT$135, but forecast that the company’s revenue would decline 10 percent year-on-year this year and net income would drop 4 percent from last year.
Chilisin shares ended 2.61 percent lower at NT$112 on Thursday in Taipei trading, after closing out last year with an annual decline of 12.5 percent.
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