Primax Electronics has estimated Kunshan's lockdown this month will affect up to 5% of its monthly revenue. Nonetheless, it expects a double-digit growth in the second quarter with new product portfolio, while continuing to expand its production site in Thailand.
The Taiwan-based IT solutions supplier revealed its first-quarter financial statement during an online investors' conference on April 28.
In the first quarter, it collected NT$17.894 billion (US$606 million) in revenues, with net profits totaling NT$543 million. Its gross profit margin reached 12.6%, up 0.1pp on year. Its operating profit margin stood at 3.4%, same as last year, the company said in a press release.
IT products contributed 53% to its revenues in the quarter, smart life applications contributed 26%, and automotive and AIoT products made up 21% - up from 16% in the last quarter of 2021.
The company said it has benefited from robust demand for advanced driver assistance systems (ADASs) in cars, police cameras, and other new applications for camera modules. After materials shortages eased, acoustics products also made notable contribution to its quarterly revenues, it added.
While its plant in China's Kunshan only plays a small part in its total production, the city's lockdown might still affect up to 5% of its April revenue, it said.
Looking ahead, Primax expects its second-quarter revenue and profit to present double-digit YoY growths. The company has made some adjustments to product portfolio, and its new products have reached a certain economic scale, it said.
The company will place more emphasis on the integration of acoustic, visual applications, and human-machine interfaces, said chairman Liang Li-sheng.
With the world embracing more smart applications, many human activities are being replaced by digital systems connected to cloud services, with sensing technology playing a vital role, Liang said.
The company seeks to add values to its products, not just boosting revenues, he added.
In choosing clients, it will become more discerning and prioritize those who have reached certain levels of revenues, who have advanced technologies and high growth potentials, whose products are high-margin applications, and who are mutually supportive with Primax, he said.
Primax has secured several such clients, and some of them are already its important sources of revenues, Liang said, expecting 50% or more of the company's revenues will come from these "solid" clients five years later.
Meanwhile, the company is expanding its production base in Thailand.
Over the past few years, Primax has shifted some producitn capacities in China to other countries, in response to clients' call for risk dispersion. In late 2021, it inaugurated a factory in Thailand.
Initially, the factory will produce PC peripherals, such as keyboards and mice, and it will increase production lines for acoustic products later, the company said, envisioning Thailand to become its largest production base outside China.
For Primax, China and Thailand mainly differ in the relative completeness of their supply chains. In Thailand, the company has to import certain materials from other countries, and its costs are rising as freight charges have surged recently, it said.
However, Thailand is demonstrating its advantage of competitive labor costs, so the company will gradually devote more resources to the country, it said.
