Liquid-crystal display and projector manufacturer Qisda Co (佳世達) yesterday said second-quarter revenue is expected to be better than the first quarter, which rose 6 percent year-on-year to NT$49.75 billion (US$1.64 billion).
However, the outlook remains uncertain, as shipments could be affected by the outcome of US trade talks, the end of the 90-day tariff pause on July 8, a stronger New Taiwan dollar and geopolitical tensions such as tensions between India and Pakistan, Qisda chairman Peter Chen (陳其宏) said at an online earnings conference.
“We will strive to maintain the revenue growth in the second quarter,” Chen said.
Photo: Chen Mei-ying, Taipei Times
Regarding the potential impact of US tariff uncertainty, Qisda president Joe Huang (黃漢州) said the company is considering building new factories in countries with lower US tariffs such as Mexico, and might relocate its artificial intelligence or industrial production lines to the US.
Qisda has small processing plants in California and would use them as a base to expand local operations, Huang said, adding that the company might seek another site if orders exceed the existing plants’ capacity.
To cope with the recent NT dollar surge, the company is adopting a natural hedging strategy to ease potential risks, while using foreign exchange forward contracts as alternative buffers, Qisda chief financial officer Jasmin Hung (洪秋金) said.
The rapid appreciation of the NT dollar is likely to affect revenue in key business sectors in the coming months, but at the same time some of the company’s more than 200 global operations using various currencies could benefit from the currency fluctuations, she said.
Qisda’s net profit in the first quarter reached NT$594 million, up 50 percent from a year earlier, with earnings per share at NT$0.25.
Gross margin rose 1.3 percentage points year-on-year to 17.3 percent — its highest ever — driven by optimized product and business mix, while operating margin was flat at 2 percent, the company said.
By sector, information and communications technology (ICT) revenue rose 7 percent year-on-year to NT$27 billion in the first quarter, followed by business solutions at NT$8.1 billion, medical applications at NT$7.2 billion, networking and communications business at NT$4.5 billion, and others at NT$3 billion, Qisda said.
The medical sector showed strong growth potential, accounting for 14 percent of total revenue and ranking second among the company’s high-value-added sectors, while networking and communications contributed only 9 percent due to industry contraction, Chen said.
The medical sector would be Qisda’s main growth driver this year, and the company plans to expand its investments in the field to differentiate itself from other ICT rivals, he said.
Revenue from the US accounted for 26 percent of Qisda’s total, but just 1 percent of its medical sector revenue, leaving room to adjust its strategy for revenue and profit growth in the coming quarters as the sector is less affected by tariff uncertainty, he said.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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