Inventec’s EPS Was NT$1.55 Last Year
[Excerpt from Economic Daily News on 03/23/2016, by Yuxiang Chen]

Inventec (2356) held stock holder’s meeting yesterday (3/22), reporting net income at NT$1.55 per share, the lowest in three years, lower than the expected between NT$1.7 and NT$1.8. Inventec’s general manager KC Huang pointed out that it was due to the increase of the cost last year as well as the loss of the currency. However, the business itself remains steady.

KC Huang expressed that the global demand for the notebook was still weak last year, particularly in the consumer sector, resulting in the decrease of shipments. The enterprise sector remains steady. The overall notebook shipments this year are expected to decline a single digit, compared with last year. The company will adjust the product mix to maintain gross margin.

For the non-notebook business, KC Huang pointed out that this year it benefited from the new products rolled out by the customer. The shipment of smart handheld devices are expected a double-digit growth. As for the server, due to the increasing demand for cloud and data center, the shipments are expected a single digit growth. Overall, the non-notebook businesses will be the major growth for this year.

Inventec’s revenue for last year was NT$395.470 billion, down 9.2% on year; net income was NT$5.564 billion, down 21.6% on year; net income per share was NT$1.55, a decrease compared with the previous year at NT$1.98. Revenue for the fourth quarter last year was NT$110.052 billion, up 4% on quarter, down 2% on year; net profit was NT$0.997 billion, down 48.7% on quarter, down 47.4% on year; net income per share was NT$0.28 on quarter, down 50% compared with the same quarter a year ago at NT$0.54, the lowest for the last twelve quarters. Inventec’s gross margin for last year was 5.5%, a slight growth compared with the previous year of 5.4%, but the profit performance was not as expected. If the RMB stops depreciating and rises again in the future, the unrealized profits and loss are expected to be offset by the profit and loss of the currency.

For the future, KC Huang pointed out that the revenue proportion from the notebook business will reduce below 40%, which will alleviate the burden caused by the weak market. And the revenue from the non-notebook businesses: smart phone, wearable device, server, solar energy and AIO will reach 60%. He is confident that the revenue for this year will be better than last year.