Chenming Electronic Tech. Corp.




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Chenming in the second half of the year is expecting a prosperity season; plans to increase holdings of Ningbo plant



Chenming (3013) Q1 although having the lost from exchange rate, but due to the increase of the server chassis orders, the profit is improved comparing to the same period in last year. While optimistic about the development of the server chassis business, Chenming will increase the shareholding of the plant in Ningbo. It is expected to enhance the profit contribution to the parent company. Based on the forecast of the server chassis business continued to grow in the second half of the year, and the high season of mobile is advent, Legal persons optimistically believes the operation of Chenming will be stronger than which in the first half of the year.

Chenming is specialized in the mechanical component R & D, and manufacturing. Servers and PC chassis contribute 60% to 70% of the revenue. The parts for smart phones, tablet PCs, and wearing devices contribute about 30%. Their core technology are MIM (Metal Injection Molding), NMT (Nanofabrication Manufacturing Technology), the rest of the revenue is from Tooling.

Chenming Q1 consolidated revenue is NT$1.072 billion, quarterly reduction of 16%, mainly due to electronic products shipped season has passed, but benefited from the server chassis business, Q1 revenue increase by 47% comparing to last year. Q1 business profit also significantly improved over the same period in the last year, but due to foreign exchange losses of NT$37 million, resulting in Q1 EPS only has NT$0.06, but much better than NT$0.17 per share loss in the last year.

Chenming, combined total revenue in April and May is closing to NT$750 million. Juristical persons optimistically believes Chenming Q2 combined revenue can be stably increase from Q1. .While the risk of foreign exchange is lowered, the profit also has the opportunity to improve continually. The Juristically persons are optimistic about the second half of the year, as the server chassis products continue to increase, coupled with the mobile device peak sales season is arriving , in addition the company's product application is also expanding. It is noteworthy that Chenming shares 52% of the Ningbo plant. It is mainly engaging in the server chassis research and development, production and manufacturing, including white-box server manufacturers, and international network manufacturers. Ningbo plant has impressive performance, which is benefited from the data center demand increasing in the recent years. Chenming is optimistic about the business profit and the operating prospects of the Ningbo factory. It will spend US$4.2 million to acquire the holdings from another shareholder Chenming Industrial (Hong Kong). Hope that through the integration of both resources to improve operating efficiency and reduce operating costs. It is expected to increase the profitability of the parent company. The acquisition is expected to be completed by April 30th of the next year. If all the conditions in line with expectations, Legal persons estimates, Chenming Mold Ind. Corp. will be Holding 20% stake in Ningbo factory.


Monedy DJ Reporter 鄭盈芷 / report