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Polytronics focuses on automotive and lighting applications
Taiwan News, Staff Writer
2014-08-26 05:43 PM

Passive component manufacturer Polytronics Technology (6224) posted a 40% quarterly growth rate in Q2 of this year. First half net income was NT$197 million and net earnings per share was NT$2.57. Institutional investors indicate, Polytronics’ annual revenue growth this year is expected at approximately 12% to 13%, profit is expected to exceed last year, and EPS is expected to start at NT$5. Institutional investors stated, Polytronics has developed new polymeric positive temperature coefficient (PPTC) protection component products for electric automobile power batteries and wearable device batteries. In the future, a good market outlook will facilitate continuing operational growth.

Polytronics was recently invited to participate in an investors conference held by the Taiwan Stock Exchange (TWSE). Polytronics chairman Chu Fu-Hua stated, Q3 is expected to remain flat compared to Q2 and the second half of the year is expected to maintain the standard set in the first half or improve on it slightly.

Polytronics posted Q2 consolidated revenue of NT$450 million for a quarterly growth rate of 25% and an annual growth rate of 24.7%. Consolidated gross profit rate was 52%, growing 49% on Q1 and 51.6% year-on-year. Operating profit was NT$150 million for a quarterly growth rate of 57.3% and annual growth rate of 30.2%. Operating profit rate was 32.8%, net income was NT$112 million for a quarterly growth rate of 40% and an annual growth rate of 15.6%, and EPS was NT$1.5, exceeding last quarter’s result of NT$1.07. Cumulative revenue for the first half was NT$822 million, net income was NT$197 million, and net earnings per share was NT$2.57.

Polytronics utilized high conductivity positive temperature coefficient (PTC) materials to manufacture battery protection components PPTC for high-end smartphone and tablets from major manufacturers such as Apple, Samsung, HTC, (2498), and ASUS (2357). Chu stated, among high-end mobile phones, Polytronics PPTCs accounted for 70% to 80% of Apple products in the past. As other brands successively entered the market, currently close to 90% of high-end Samsung mobile phones use Polytronics products and these products cover virtually the entirety of China’s mid-range mobile phone market.

Before 2009, Polytronics accounted for 70% to 80% of the PC market. With the rapid development of smartphones in recent years, currently, corporate PPTC market share is 60%. However, PC market share has declined yearly before slowing this year. In 2014, PPTC growth momentum originated primarily from the iPad mini and high-end smartphone batteries from Korea and China. Polytronics currently has a PPTC market share of close to 30% among smartphones worldwide. Adding tablets, market share exceeds 30%.

With the electronic car trend launched by Tesla, electric car power battery safety has garnered much attention. A single battery equipped with a PPTC is expected to become a design trend. Heat radiation and conduction of the battery module will also be a new opportunity for Polytronics to develop cooling materials. Chu stated, Polytronics has long developed cooling materials. In the past, the company focused on TV backlighting heat dissipation substrates. In recent years, Polytronics has concentrated on LED lighting to develop high thermal conductivity material TSP and TRM as interface materials for LED packaging. As design of LED omnidirectional light bulbs increases, demand for Polytronics TSP and TRM products will increase as willwell. Portion of revenue accounted for by cooling materials is expected to grow from 15% currently to 20%.

Polytronics posted July revenue of NT$141 million for a monthly growth rate of 0.44% and an annual growth rate of 14.72%. Cumulative January to July 2014 revenue was NT$963 million for an annual growth rate of 12.89%.

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