TPK Holding Co (宸鴻) on Friday posted 4.55 percent annual net profit growth for last quarter, as COVID-19-induced remote working and online learning boosted demand for notebook computers and tablets, offsetting weaker smartphone demand.
The supplier of touch modules and touch sensors said it expects that the growth momentum to carry into this quarter, as demand for notebook computers and tablets would remain robust amid a post-COVID-19 hybrid working trend combining remote and office work.
TPK believes that the demand will “remain strong in the second half, extending the strength of the first half,” TPK chief executive officer Leo Hsieh (謝立群) said in reaction to investors voicing concern that demand for laptops and tablets would weaken after major economies relaxed COVID-19 pandemic prevention measures.
Photo: Chen Mei-ying, Taipei Times
“However, we realized that a short supply of ICs has affected our customers,” Hsieh said. “To match the uneven supply of key components, clients are adjusting their product lineups.”
In the past few years, the firm’s revenue increased 10 to 15 percent sequentially in the third quarter as the electronics industry entered its peak season, TPK chief strategy officer Freddie Liu (劉詩亮) said, calling it an appropriate reference for the third quarter of this year.
Operating margin is expected to be 0.5 to 1 percent this quarter, similar to 0.7 percent last quarter, Liu said.
Last quarter’s operating margin was up from 0.2 percent sequentially thanks to increased shipments of laptops and tablets touch modules, but down from 1.5 percent annually as the company continued to restructure its business, Liu said.
Touch modules contributed 49 percent to the firm’s revenue of NT$24.59 billion (US$882.6 million) last quarter, up from 38 percent in the previous quarter.
Gross margin and the average selling price of TPK products rose last quarter thanks to product mix improvements, Liu said.
Gross margin was 4 percent last quarter, up from 2.9 percent in the first quarter, but down from 5 percent in the same period last year.
Net profit rose to NT$322 million in the April-to-June period, compared with NT$308 million in the second quarter last year.
However, that was a quarterly contraction of 8 percent from NT$350 million.
Earnings per share climbed to NT$0.79, up from NT$0.76 a year earlier, but down from NT$0.86 in the first quarter.
Addressing growing competition from GIS Holding Ltd (業成), TPK said that it would remain the biggest supplier to its key customers.
GIS is vying for a bigger order allocation from Microsoft Corp — the second-biggest customer of TPK products, with a revenue contribution of 20 to 30 percent.
However, in some areas, GIS does not directly compete with TPK, Liu said.
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