Hana Microelectronics Plc, the country's biggest semiconductor packager, has started investing again and taking on staff to meet rising orders after posting better-than-expected financial results in the second quarter.
About 350 million to 500 million baht will be spent on new production equipment later this year, mainly in the integrated circuit (IC) division. Hana is also looking to hire 600 new staff, said chief financial officer Terry Weir.
"Hana will invest and hire labour to build the products according to customer demand. Therefore, as the recovery takes place and new products are ordered by our customers, we will have to increase investment to be able to meet that demand in the second half of the year," he said.
The SET-listed electronic parts maker currently employs about 8,000 people and is running at about 80% of capacity.
Customer inventory replenishment and partial economic recovery enabled Hana to perform better in the second quarter than in the first three months,and to beat its own expectations for the first half, said Mr Weir.
In the second quarter, Hana's net profit of 504 million baht was down only 7.6% year-on-year and up 151%from 201 million baht in the first quarter.
First-half net profit was 705.44 million baht (0.86 baht a share), down 29% from 993.55 million (1.20 baht a share) a year earlier.
Second-quarter sales revenue dropped 18% year-on-year to 3.22 billion baht.But sales were up 22% from the first quarter, with IC sales up 46% while microelectronics rose 16%, Hana said in a filing to the Stock Exchange of Thailand.
"The first half of 2009 was much better than was expected at the beginning of the year, thanks to customer inventory replenishment and partial economic recovery," said Mr Weir."The large extent of demand recovery can be seen in second-quarter results.[But] continuing strength of customer demand remains a challenge for the rest of the year."
Analysts were upbeat about Hana's results.
"Hana's stellar earnings of 504 million baht in the second quarter, an increase of 151% from the first quarter, beat our expectation by 36.3% and the consensus by 34.3%," KGI Securities (Thailand) said in a report."A higher-than-expected gross margin was the reason for the surprise."
Sales also showed a significant recovery from rock bottom in the first quarter. The company's balance sheet was solid, being debt-free and with cashon-hand of about 3.7 billion baht, KGI said.
Shares of Hana closed on Friday on the SET at 18.50 baht, up 40 satang, in trade worth 6.8 million baht.
Monday, August 17, 2009
Delta expanding into solar power
Delta Electronics (Thailand) Plc has been in talks to acquire US and European solar power equipment makers as it has earmarked $200 million to diversifying into electrical power over the next two years.
"If you want to do business in the US, you have to acquire a US company.And if you need more market share in Europe, you have to do the acquisitions," Delta president Henry Shieh said yesterday.
"We are discussing with companies in the US and Europe in terms of shares and prices to make sure we do it right.About $100 million could be spent before 2012 and we have the capacity to double the amount."
Those companies, according to Mr Shieh, are $500-million businesses that are now having financial problems because of lower subsidies from governments in the face of the global recession.
Delta, the largest electronics firm on the Stock Exchange of Thailand by revenue and market capitalisation, says market conditions and its financial results have become more favourable for making new investments.
The market started to come back in June and July with some stocks depleting. Some urgent orders are placed this month, indicating that the demand is there, said Mr Shieh.
"At least we feel more comfortable now with our performance is getting better and moving toward the right trend," he noted."Our cash on hand of over 8 billion baht also supports our investments."
Anusorn Muttaraid, Delta's executive director, said the talks with the US company were expected to be concluded this quarter while negotiations with European parties could finish in the final quarter.
"The deals are targeted to cost less than 3 billion baht. At least we will have these two deals done this year,"Mr Anusorn said."Through the acquisition, Delta would not only acquire the plants but also the market and technology from the US and Europe."
Delta yesterday reported a net profit of 301 million baht in the second quarter,down by half from 621 million in the same period of last year, as revenue fell 27% to 6 billion baht.
In the first six months, earnings dropped to 812 million baht from 1.42 billion a year earlier as revenue decreased 22% to 12.42 billion baht.
Mr Anusorn said the company forecast that 2009 revenue would be about $900 million, down from $1 billion made in 2008.
Mr Shieh said Delta aimed to double its revenue to $2 billion in 2013.
Its plants are currently running at 65% of the maximum capacity, compared with 85% the same period of last year, he added.
KGI Securities said Delta's earnings in the quarter to June were in line with the expectations, off 41% from the first quarter, while its gross margin edged down from 25.8% to 26.4%.
"Despite weak earnings in the second quarter, Delta's balance sheet remains robust with a debt-to-equity ratio of 0.5 times. The company also has hefty cash on hand of 8.1 billion baht while short-term debt amounts to only 1.3 billion, without long-term debt," KGI said in a report.
DELTA shares closed yesterday on the Stock Exchange of Thailand at 16.10 baht, unchanged, in trade worth 28 million baht.
"If you want to do business in the US, you have to acquire a US company.And if you need more market share in Europe, you have to do the acquisitions," Delta president Henry Shieh said yesterday.
"We are discussing with companies in the US and Europe in terms of shares and prices to make sure we do it right.About $100 million could be spent before 2012 and we have the capacity to double the amount."
Those companies, according to Mr Shieh, are $500-million businesses that are now having financial problems because of lower subsidies from governments in the face of the global recession.
Delta, the largest electronics firm on the Stock Exchange of Thailand by revenue and market capitalisation, says market conditions and its financial results have become more favourable for making new investments.
The market started to come back in June and July with some stocks depleting. Some urgent orders are placed this month, indicating that the demand is there, said Mr Shieh.
"At least we feel more comfortable now with our performance is getting better and moving toward the right trend," he noted."Our cash on hand of over 8 billion baht also supports our investments."
Anusorn Muttaraid, Delta's executive director, said the talks with the US company were expected to be concluded this quarter while negotiations with European parties could finish in the final quarter.
"The deals are targeted to cost less than 3 billion baht. At least we will have these two deals done this year,"Mr Anusorn said."Through the acquisition, Delta would not only acquire the plants but also the market and technology from the US and Europe."
Delta yesterday reported a net profit of 301 million baht in the second quarter,down by half from 621 million in the same period of last year, as revenue fell 27% to 6 billion baht.
In the first six months, earnings dropped to 812 million baht from 1.42 billion a year earlier as revenue decreased 22% to 12.42 billion baht.
Mr Anusorn said the company forecast that 2009 revenue would be about $900 million, down from $1 billion made in 2008.
Mr Shieh said Delta aimed to double its revenue to $2 billion in 2013.
Its plants are currently running at 65% of the maximum capacity, compared with 85% the same period of last year, he added.
KGI Securities said Delta's earnings in the quarter to June were in line with the expectations, off 41% from the first quarter, while its gross margin edged down from 25.8% to 26.4%.
"Despite weak earnings in the second quarter, Delta's balance sheet remains robust with a debt-to-equity ratio of 0.5 times. The company also has hefty cash on hand of 8.1 billion baht while short-term debt amounts to only 1.3 billion, without long-term debt," KGI said in a report.
DELTA shares closed yesterday on the Stock Exchange of Thailand at 16.10 baht, unchanged, in trade worth 28 million baht.
Keypad maker to enter SET next month
Electronics component manufacturer Stars Microelectronics (Thailand) Plc aims to float on the Stock Exchange of Thailand next month to serving the rebound in global electronics industry.
The Thai-owned firm, which supplies keypads to leading brands such as Blackberry and Google T-Mobile, expects its net profit to rise by 15% this year on revenues exceeding 12 billion baht.
SMT would become the first locally owned electronics company to list in the Thai bourse for five years, said cofounder and chief executive Polsak Lertputipinyo.
"After the electronics component market dropped sharply in the final quarter of 2009 and the first three months of this year, we have seen the demand rebound in the second quarter," he said.
The manufacturer saw positive growth resume for about two months of the second quarter after a 10-15%year-on-year decline in the first three months.
First-half revenue totalled 4.59 million baht with a net profit of 115 million baht, both up 10% over the same period of 2008.
From 2004 to 2008 SMT's revenue grew by an annual average of 40%,from 4.46 billion baht to 12.13 billion.Net profit jumped at a cumulative annual rate of 65%, from 45 million baht to 201 million.
Some 92 million shares, or 25% of SMT's registered capital, will be sold in the initial public offering (IPO) in September to retail and institutional investors.
The proceeds will be used to repay debt and to financially restructure the firm to achieve a lower net interestbearing debt-to-equity ratio, which currently stands at 1.2 times.
Current earnings per share is 0.42 baht, with a return on equity of 23.1%.SMT has a 600-million-baht credit facility for capacity expansion and to serve 150 million baht in additional investments this year.
SMT's 2.7-billion-baht manufacturing plant in Bang Pa-in, Ayuthaya, is running at 60% of maximum capacity for exports. The facility has annual capacity of 80 million microelectronics modules assembly (MMA) components and 700 million integrated circuit (IC)units.
Mr Polsak said SMT has a 30% share of the Thai smart phone market and 10% of both laptop mouse pads and hard-disk drive control board.
Tisco Securities, SMT's financial advisor, said the electronics industry is one of the sectors which has rebounded quickly on signs of a global economic recovery. By jointly developing new products and technologies for clients the Thai electronics firm will be able to enjoy higher margins and win new contracts to improve its shipments.
In 2010, SMT plans to launch new airbag pressure sensors targeting luxury car brands, such as Mercedes, BMW and Audi, which gross margin is as high as 50%. Handheld laser projectors for cell phones will be introduced to boost its MMA business' margins which now stand at 20%.
The company can continue to increase its profit during the global recession. Investors should view SMT as a potential stock for alternative investment, said Tisco.
The Thai-owned firm, which supplies keypads to leading brands such as Blackberry and Google T-Mobile, expects its net profit to rise by 15% this year on revenues exceeding 12 billion baht.
SMT would become the first locally owned electronics company to list in the Thai bourse for five years, said cofounder and chief executive Polsak Lertputipinyo.
"After the electronics component market dropped sharply in the final quarter of 2009 and the first three months of this year, we have seen the demand rebound in the second quarter," he said.
The manufacturer saw positive growth resume for about two months of the second quarter after a 10-15%year-on-year decline in the first three months.
First-half revenue totalled 4.59 million baht with a net profit of 115 million baht, both up 10% over the same period of 2008.
From 2004 to 2008 SMT's revenue grew by an annual average of 40%,from 4.46 billion baht to 12.13 billion.Net profit jumped at a cumulative annual rate of 65%, from 45 million baht to 201 million.
Some 92 million shares, or 25% of SMT's registered capital, will be sold in the initial public offering (IPO) in September to retail and institutional investors.
The proceeds will be used to repay debt and to financially restructure the firm to achieve a lower net interestbearing debt-to-equity ratio, which currently stands at 1.2 times.
Current earnings per share is 0.42 baht, with a return on equity of 23.1%.SMT has a 600-million-baht credit facility for capacity expansion and to serve 150 million baht in additional investments this year.
SMT's 2.7-billion-baht manufacturing plant in Bang Pa-in, Ayuthaya, is running at 60% of maximum capacity for exports. The facility has annual capacity of 80 million microelectronics modules assembly (MMA) components and 700 million integrated circuit (IC)units.
Mr Polsak said SMT has a 30% share of the Thai smart phone market and 10% of both laptop mouse pads and hard-disk drive control board.
Tisco Securities, SMT's financial advisor, said the electronics industry is one of the sectors which has rebounded quickly on signs of a global economic recovery. By jointly developing new products and technologies for clients the Thai electronics firm will be able to enjoy higher margins and win new contracts to improve its shipments.
In 2010, SMT plans to launch new airbag pressure sensors targeting luxury car brands, such as Mercedes, BMW and Audi, which gross margin is as high as 50%. Handheld laser projectors for cell phones will be introduced to boost its MMA business' margins which now stand at 20%.
The company can continue to increase its profit during the global recession. Investors should view SMT as a potential stock for alternative investment, said Tisco.
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