Leading industrial PC maker Advantech Co (研華) yesterday gave a positive outlook for this quarter, saying that good order visibility would extend into the first half of next year.
The company expects revenue to grow by 0.6 to 4.2 percent quarter-on-quarter to US$510 million to US$530 million in the third quarter, with operating margin improving to 16 to 18 percent.
Advantech chief financial officer and president of general management Eric Chen (陳清熙) said that component shortages caused a “relatively higher rate of deferred orders in North America,” but Advantech is benefiting from projects resumed after COVID-19 lockdowns.
Photo: CNA
“In all remaining markets we are expecting to see double-digit percentage growth rates,” Chen told an investors’ conference in Taipei. “We are benefiting from soaring demand for infrastructure, green energy and smart healthcare, and overall business momentum is strong.”
Advantech reported a net profit of NT$1.79 billion (US$64.3 million) in the second quarter, down 22.4 percent from a year earlier, or earnings per share of NT$2.31.
Revenue was NT$14.21 billion, up 1.4 percent year-on-year and marking the second-highest level in the company’s history.
With stronger order momentum from clients, the company's book-to-bill ratio for the second quarter was 1.72, a historical high, it said.
In the first half of the year, net profit rose 2.8 percent year-on-year to NT$3.7 billion, or earnings per share of NT$4.79, while revenue increased 8.2 percent to NT$27.37 billion.
Orders rose 80 percent year-on-year thanks to improved demand for industrial computers, servers and other industrial applications, the company said.
“Advantech adopted a proactive approach, such as signing long-term agreements to guarantee supply commitments, as well as introducing alternative component sources,” chief operating officer Jamie Lin (林東杰) said. “Advantech also plans to scale up production at its Taoyuan and Kunshan sites simultaneously. It is expected that production capacity will increase by 30 percent in the second half of the year in preparation for the expected rush of orders after the shortage is alleviated.”
The company is adopting a new Globally Integrated Regional Competence strategy, which would “strengthen local services,” Chen said.
This strategy would first be implemented in Japan and South Korea, he said.
“Combined revenue from Japan and South Korea aims to exceed US$400 million by 2025, and the same business concept would gradually be implemented in China and Taiwan,” he added.
Separately, PC brand Acer Inc (宏碁) yesterday reported a net profit of NT$2.9 billion for the second quarter, up 142.5 percent year-on-year, the highest level in 11 years.
Revenue was NT$79.78 billion, while gross margin and operating margin were 12 and 5 percent respectively, it said.
“Demand in the PC business remained higher than supply, with visibility to the end of this year,” Acer said in a statement.
In the first half of the year, Acer's revenue was NT$151.33 billion, with net profit of NT$5.64 billion, up 221.8 percent year-on-year.
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