BizLink Holding Inc (貿聯) has proposed a cash dividend of NT$8.25 per share, after the wire harness maker reported earnings per share of NT$14.01 for last year, it said last week.
The board of directors’ proposed dividend was lower than last year’s distribution, when the company paid NT$9 per share on earnings per share of NT$15.54 in 2019.
The proposal represents a payout ratio of 58.89 percent. Based on the company’s closing share price of NT$268 on Friday, it also suggests a dividend yield of 3.08 percent.
Photo: STR/AFP/China OUT
BizLink — the sole supplier of wiring harnesses for battery management systems in Tesla Inc’s Model 3 sedans — reported that net profit last year decreased 0.85 percent year-on-year to NT$1.83 billion (US$64 million) on revenue of NT$22.54 billion, down 2.4 percent from 2019.
Gross margin was 25.33 percent, due to better cost controls and an improved product mix, while operating margin was 10.87 percent, BizLink said.
The firm’s profit margins have been under pressure in the near term due to unfavorable foreign-exchange rates and rising raw material prices, Yuanta Securities Investment Consulting Co (元大投顧) said in a note on Friday.
“However, for the mid to long term, we believe BizLink’s ongoing product mix improvement will drive its operating profit growth of 25 percent year-on-year in 2021 and 21 percent growth for 2022,” Yuanta said.
BizLink’s products also include cables for electric-vehicle battery management systems, as well as components for information technology, consumer electronics, electrical appliances and telecom equipment.
The effects of the COVID-19 pandemic persisted in the fourth quarter last year, driving demand for cloud-based services and boosting its shipments in the information technology, consumer electronics, electrical appliances and vehicle segments.
Year-end holiday demand also caused port congestion, container shortages and other logistics hurdles, which delayed some equipment for electrical appliances, and the automotive and semiconductor industries from December last year into January, it said.
Overall, materials costs and component shortages were key headwinds in the fourth quarter, it said.
BizLink remains positive about this year’s outlook as companies seek to diversify their production and vaccine rollouts are under way, it said.
However, global supply chains would remain strained as the effects of the pandemic persist, with higher costs as a result of elevated demand, rolling partial lockdowns, various materials and component shortages, as well as extreme weather in some areas, it said.
“Our long-term outlook remains favorable, and we anticipate sustained growth within data centers, energy, electric vehicles and semiconductor capital equipment,” BizLink said.
“A rising contribution from these secular drivers will represent a steady overall flow of long-term sales and profit growth over the next few years,” the company said. “Further developments within these secular drivers are ongoing with momentum to build up step by step, and add to our long-term aspirations.”
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