Kaimei Electronic Corp (凱美電機), a passive-component affiliate of Yageo Corp (國巨), yesterday said its customers’ inventories are expected to return to healthy levels in the second quarter next year, and the firm is optimistic for a recovery of its factory utilization and business outlook.
Inventories surged to a record high last quarter, and Kaimei turned bearish in its market outlook as consumer demand contracted amid mounting inflation, economic downside risks and the Ukraine war, but the situation should improve quarter by quarter, Kaimei said.
“Following two quarters of inventory digestions, we expect customers to drive inventories down to healthy levels in the second quarter next year,” company spokesman Andre Lee (李彥儒) told investors during an online conference yesterday. “We are optimistic about the company’s business.”
Kaimei growth is expected to be driven by robust demand for passive components and fans used in automotive devices for the remainder of the year, Lee said, adding that revenue contribution from such devices should jump to 9.2 percent this year from 5 percent last year.
That would also boost profit, as automotive components usually deliver better gross margin and higher average selling prices, he added.
Kaimei’s resistor business was hit the hardest by shrinking demand for computers and smartphones, as consumers have reduced spending on electronics during the post-COVID-19 era, Lee said.
Surging inflation and the Ukraine war have compounded the situation, he said, adding that the two factors cut into the firm’s chip resistor utilization by about 40 percent last quarter.
Electric capacitor production sank to about 70 percent last quarter, Lee said.
Chip resistors are the firm’s largest revenue source, accounting for 49 percent of earnings, while capacitors comprised 41 percent last quarter.
However, utilization capacity for computers fans, industrial equipment and medical devices stood at more than 95 percent, as the firm’s customer base and orders increased, he said.
The company expects revenue from fans to grow by double-digit percentages this year and for the next two to three years, Lee said.
As a result, revenue contribution from fans is to make up a larger share of about 15 percent within two years, from 10 percent currently, he said.
Net profit last quarter plummeted 54 percent year-on-year to NT$178 million (US$5.72 million), from NT$387 million, with earnings per share dipping to NT$1.39 from NT$2.85, Kaimei reported.
In the first three quarters, net profit plunged about 39 percent year-on-year to NT$606 million, with earnings per share dropping to NT$4.74 from NT$7.3, it said.
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