Financial News

2021/07/27

Coretronic Corporation Announces Second Quarter 2021 Results

Hsinchu, Taiwan – Coretronic Corporation (5371.TW) today announced its financial results for the second quarter of 2021. For the second quarter ended on June 30, 2021, Coretronic posted consolidated sales revenue of NT$11,650 million. Although it was affected by the shortage of supply chain, flights, and containers, the sales revenue still grew 16% QoQ and 10% increase compared with the same period last year. Consolidated gross profit margin increased by 1.9% to 18.4% from 16.5% in the previous quarter, mainly due to the increased revenue and plant utilization, which was a slight decrease of 0.05% from 18.5% in the same period last year. Operating income was NT$386 million, a significant increase of 391.6% from the first quarter and a growth of 20.7% from the same period last year. Net income was NT$552 million, representing a 51.8% increase in QoQ, and an increase of 5.1% from NT$525 million in the same period last year. Net income attributable to equity holders of the parent company was NT$548 million, which is an increase of 41.9% from NT$386 million in the previous quarter and a slight decrease of 0.6% from NT$552 million in the same period last year. The basic EPS* for the second quarter was NT$1.4.

For the first half of 2021, Coretronic reported consolidated sales revenue of NT$21,673 million, representing an increase of 14% YoY, driven by the increase in revenue of the two major product lines. Consolidated gross margin was 17.6%, increased by 0.3% compared with 17.3% in the first half of 2020, mainly driven by the increase in utilization rate and plant efficiency. Operating income totaled NT$464 million, significant growth of 256% over the same period last year. Net income was reported at NT$915 million, up 96% YoY. Net income attributable to equity holders of the parent company was NT$935 million, an increase of 68% YoY. The basic EPS for the first half of this year was NT$2.32, which was also an increase from NT$1.28 in the same period last year. Calculated on the basis of June 30, 2021 outstanding shares, EPS was NT$2.39***.

“For the second quarter of 2021, the overall sales revenue of Energy Saving Business Group was NT$5,829 million, an increase of 14% QoQ and 3% YoY; the shipments were 14.06 million units, an increase of 12% QoQ and 15% YoY. Thanks to the upward trend in shipments of all applications. For 1H of 2021, the sales revenue amounted to NT$10,943 million, and shipment was 26.58 million units, up 10% and 29% YoY, respectively, this was mainly due to the growth of TV/PID and NB model shipments driven by the WFH and distance education demand” said Ms. Sarah Lin, President of Coretronic. Looking forward to the third quarter of 2021, Sarah pointed out that the increase in demand for TV/PID peak season shipments will drive the ASP to improve, but the overall containers shortage has not eased while the NB shipments will show an upward trend but there have material shortages issues. Therefore, it is estimated that the overall shipments of Energy Saving products in the third quarter will increase by about 10% QoQ. Regarding the increased investment in the second factory in Vietnam, Sarah explained that in order to meet the growth of customer demand, it will obtain the land use rights of the Phu My 3 Specialized Industrial Park in Ba Ria-Vung Tau Province, Vietnam to build the second factory in Vietnam. Coretronic plans to start construction before the end of 2021, and mass production will begin in the first half of 2023 at the earliest. The initial business will focus on the production, manufacturing, and sales of TV LCD modules and components. It is expected that the expansion of the new plant will satisfy customers in the future. The new order growth plan, in addition, will also expand new customers, and gradually integrate Vietnam's production and manufacturing bases. Looking forward to the future development of operations, Sarah expects the overall shipments will grow by 20% this year, mainly due to the increase in TV/PID demand and the business with new NB customers.

“Due to the shipment growth in various light sources and application product lines, the shipment of Visual Solutions products was 217K unit in 2Q21, up 10% QoQ and 12% YoY, while the sales revenue was NT$3,113 million, representing a 7% QoQ increase and 11% growth YoY. For 1H of 2021, the shipment was 413.7K units and sales revenue was NT$6,020 million, up 14% and 23% YoY respectively, mainly due to the stay-at-home economy and sports events stimulating 4K demand, driving the increase in shipments of SSI and Large Venue models” said Mr. SY Chen, President of Coretronic. Looking forward to the third quarter of 2021, SY expects that the overall shipments will increase by about 10% QoQ. Looking into 2H21 and future development, SY explained that lockdown & Hybrid working/learning drive the need for large Home projection, 4K ultra-short-throw home Laser TV, and short-throw high-brightness pro-AV applications are booming continuously. Coretronic will expand home projection product portfolio with enhanced smart AIoT and gaming features to capture “Hybrid” (working/learning) trend and will cooperate with strategic customers to co-develop new products for the post-Covid market. Although the supply & demand in 2H21 will continue to be a challenge, Coretronic will improve efficiency and create profits through active management, and it is expected that the overall shipments of Visual Solutions will grow by 10%~20% in 2021.

* Basic EPS was calculated based on the total weighted average outstanding shares of each quarter (391m shares in 2Q21, 416m shares in 1Q21 & 434m shares in 2Q20)
** Basic EPS was calculated based on the total weighted average outstanding share (403m shares in 1H21 and 434m shares in 1H20)
*** Basic EPS was calculated based on the outstanding share of the balance sheet date (391m share in 2021 and 434m shares in 2020)