TAIPEI: General Interface Solution Holding Ltd (GIS), which supplies touchpanels for Apple Inc’s iPhone and iPad series, yesterday posted stronger-than-expected first quarter net profits, thanks to an improved gross margin.
Net profits grew ninefold to NT$353.05 million (US$10.89 million) during the quarter ending March 31, compared with NT$37.36 million in the same period last year. That translated into earnings per share of NT$1.13, up from NT$0.13 a year ago.
The figure exceeded the NT$297 million estimated by Daiwa Capital Markets analyst Kylie Huang. Huang gave a “Buy” rating on GIS, in expectation of a robust annual net profit growth of 29 percent, benefiting from growing adoption of 3D touch and pressure touch sensors in new iPhone models.
Gross margin climbed to 8.62 percent last quarter from 5.07 percent in the previous quarter, beating Huang’s estimate of 7.6 percent.
GIS, which is 25 percent owned by Hon Hai Precision Industry Co Ltd, attributed better yield rate and higher portion of tablet touchpanels to the improvement in gross margin, according to a company official who spoke on condition of anonymity.
Touchpanels used in tablets accounted for a higher profit share, ranging from 55 to 60 percent of the company’s revenue of NT$19.59 billion last quarter, up from about 50 and 55 percent through the whole of last year.
On a quarterly basis, GIS net profits plunged 68.5 percent last quarter from NT$1.12 billion in the final quarter of last year, as slow sales of Apple’s iPad Pro and iPhones curtailed demand.
This quarter, GIS’s revenues are expected to regain growth of 13 percent sequentially after sales of Apple’s next-generation iPad gather steam, said Huang, who also expects GIS to clinch new orders for Apple’s new iPad Air.
The company, located in Miaoli County, yesterday posted a 15.2 percent sequential decline in revenue for last month at NT$4.67 billion, compared with NT$5.51 billion in March. That represented an annual growth of 11.04 percent.
The company expects shipments and revenue to pick up this month and next month, supported by customers’ new product launches.
However, rival TPK Holding Co expects revenue to drop 18 percent sequentially this quarter, blaming weakening demand for smartphones. TPK supplies touchpanels for Apple’s iPhone series and Apple Watch.
Separately, LCD panel maker Innolux Corp yesterday posted an 11.9 percent rebound in revenue for last month at NT$20.94 billion, up from NT$18.71 billion in March. Innolux holds a 13 percent share of GIS.
Shipments of PC and TV panels rose 2.5 percent to 8.16 million units last month from a month ago, while shipments of small and medium-sized panels expanded 15.4 percent month-on-month to 18.97 million units, Innolux said in a statement.
On an annual basis, last month’s revenue plunged 35.4 percent from NT$32.4 billion.
GIS shares yesterday rallied 2.58 percent to NT$83.5, while the stock price of TPK dived 3.34 percent to NT$60.8. The TAIEX edged 0.18 percent lower.
