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TPK Holding CFO: Moderate Q3 Performance Expected

2014/08/08 | By Steve Chuang

Affected by shipment delays due to customers deferring new product launches, TPK Holding Co., Ltd., a Taiwan-based touch panel maker, is likely to see moderate performance in Q3 of this year, said its chief financial officer, Freddie Liu, at an investor conference held in late July.

With Apple Inc., TPK Holding's major customer, having postponed the launch of iWatch and new iPad to have negatively affected the Taiwanese supplier's revenue since the beginning of Q3 of this year, Liu admitted that his company therefore projects growth to slow between plus and minus 5% in the quarter after posting better-than-expected revenue and profits in Q2.

TPK saw a robust Q2, as the company's latest financial report shows revenue for the quarter at NT$30.7 billion (US$1.023 billion) for a 15.3% increase compared to the first quarter to beat institutional investors' expectations, with net profits of NT$320 million (US$10.67 million), and H1 cumulative EPS (earnings per share) of NT$1.37.

The company attributes the brisk revenue growth partly to strong market demand for higher-end smartphones, and partly to significantly surging global sales of touchscreen laptops and large-screen tablets, which has directly helped the firm's shipments of touch panels to the abovementioned sectors to surge  32% and 230%, respectively, quarter-on-quarter (QoQ). Shipments for use in tablets with smaller-sized screens, however, declined about 26% QoQ due to low reason.

Noteworthy is that sub-7-inch touch panels contributed about 51% to the firm's revenue in Q2, when it shipped enough such models to make 14 million smartphones, suggesting its solid footing in the touch panel segment for smartphones.

But, TPK Holding's overdependence on shipments to single customers, to some extent, has seen negative results, as institutional investors generally opine the company's overall performance is unlikely to grow notably until Apple's new iPad, iPad Mini and iWatch hit the market, although growing market penetration of touchscreen laptops is beginning to show benefit and expected to sustain shipment in Q3. (SC)