Industrial computer maker Ennoconn Corp (樺漢科技) yesterday said revenue this quarter is expected to grow sequentially, driven by rising demand for its smart retail products, particularly in the North American market.
The growth momentum is expected to come from the commercialization of its physical artificial intelligence (AI) solutions for smart retail applications, Ennoconn chairman Steve Chu (朱復銓) told an earnings conference in Taipei.
Additional drivers include orders from US semiconductor makers for smart factory and automation applications, aerospace and military products, and orders related to AI data center construction in North America, Chu said.
Photo courtesy of Ennoconn Corp
The firm holds orders totaling NT$215 billion (US$6.81 billion), up from NT$190 billion last quarter, indicating robust shipment momentum this year, he said.
Revenue in the first quarter fell 6.07 percent quarter-on-quarter, but rose 7.67 percent year-on-year to NT$37.11 billion, Ennoconn said.
Ennoconn’s business consists of three main segments: industrial Internet of Things (IoT), which accounted for 48 percent of total revenue last quarter; intelligent software and solutions (14 percent); and smart factory and facility management (38 percent), it said.
Among the three segments, growth this quarter is expected to be strongest in the intelligent software and solutions business, Chu said.
The business delivers 30 percent of gross margin, the most among the three segments, he said.
As part of the segment, Ennoconn expects to generate more revenue from a project with Atlanta, Georgia-based retail solutions provider NCR Voyix Corp, he said.
The project started contributing revenue of NT$1 billion last month after entering volume production, he said.
In addition, smart factory and facility management businesses this quarter are expected to benefit from demand related to semiconductor factory operations, particularly for high-tech equipment and automation systems, Chu said.
Revenue from Ennoconn’s industrial IoT business is also expected to rise, supported by demand for smart retail and financial applications, he said.
Ennoconn on Thursday reported first-quarter net profit of NT$751 million, down 13.6 percent quarter-on-quarter and 9.1 percent year-on-year.
Earnings per share fell to NT$5.15 from NT$6.3 in the previous quarter and NT$6.02 a year earlier.
Gross margin fell to 20.11 percent from 20.63 percent the previous quarter and 21.52 percent a year earlier.
Last quarter’s results fell short of the company’s expectations, as some orders were pushed into this quarter, Chu said.
That does not affect the company’s expectation that net profit and gross margin in the first two quarters of this year would improve from the same period last year on the back of clearer order visibility, he said.
The firm would hike prices from this quarter to pass on memorychip costs to customers, Chu said.
To improve profitability, Ennoconn aims to boost revenue share from AI-related products to 25 percent this year from less than 20 percent last year as part of its efforts to expand revenue contribution from high-margin products, he added.
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