Wah Lee Industrial Corp. (3010.TT)
2023 2Q Management Report
August 22, 2023
Company Basic Information | 2Q23 Consolidated Results Announcement | ||||||||||||
Closing Price (22/08/2023) | NT$87.1 | Wah Lee's 1H23 cumulative sales reached NT$30,545 million, a 19.3% | |||||||||||
52 WK High | NT$93.6 | YoY decrease. | |||||||||||
52 WK Low | NT$77.5 | Information Communication Technology 25.45% YoY decline: The | |||||||||||
Book Value/share | NT$71.6 | ||||||||||||
hawkish tone of US FED on interest rates, leading to conservative | |||||||||||||
Shares on Issue (M) | 236.0 | ||||||||||||
Market Cap (USD M) | 653 | consumer behaviors and high inventory levels, has continued to cause | |||||||||||
QFII Holding (%) | 11.5 | the slow-moving of ICT materials in 1H23, albeit the monthly sales | |||||||||||
Monthly Avg Daily Turn | NT$100M | ||||||||||||
have grown month by month. Wah Lee's high-end engineering | |||||||||||||
Key Financial Indicators | plastics and PCB/MB materials both posted YoY declines. | We expect | |||||||||||
to see mild to strong returns of demands in 2H23 on a HoH basis, | |||||||||||||
2021 | 2022 | 1H23 | |||||||||||
possible growth can be in double digits. | |||||||||||||
ROE | 19.1% | 15.0% | 11.4% | ||||||||||
Semiconductor 0.51% YoY increase: Wah Lee's semiconductor raw | |||||||||||||
Debt/Asset | 61.0% | 62.0% | 60.0% | ||||||||||
Cash Conversion | materials for the high end manufacturing processes, now into 3 nm, are | ||||||||||||
Days | 76.5 | 76.0 | 91.4 | ||||||||||
playing a critical role in the semiconductor industry. The inventory | |||||||||||||
digestion speed had been slower than expected in the beginning of the | |||||||||||||
year. 2Q23 semi sales was lower than 1Q23 sales, which was | |||||||||||||
3010 WL | Price Chart | (1 yr) | consistent with the view of the leading foundry maker in their most | ||||||||||
recent analyst meeting. However, with the demands of AI servers and | |||||||||||||
next generation smartphone chips, semi material sales will resume its | |||||||||||||
growth momentum soon. | |||||||||||||
FPD 26.21% YoY decline: The FPD sales in 1H23 showed a YoY | |||||||||||||
decline because in January 2022 the electronic whiteboards were | |||||||||||||
shipped in large quantities to avoid the delay of delivery due to the | |||||||||||||
Product Mix (1H23) | Chinese New Year holidays. | However, the whiteboard | sales has | ||||||||||
returned in 2Q23 and will continue to rise in 2H23. FPD sales also | |||||||||||||
expects a significant 2H23 HoH sales growth. | |||||||||||||
Green Energy 39.88% YoY decline: The mainland Chinese government | |||||||||||||
phased out their EV subsidy policy starting in 2023 and the rush to | |||||||||||||
purchase EVs before the phase out in Q4 2022 has driven down the | |||||||||||||
demands of EV batteries in 1H23. However, the EV battery cathode | |||||||||||||
materials and electrolyte sales will recover in 2H23 due to the | |||||||||||||
expansion into new customers. | |||||||||||||
1H23 EPS: NT$4.15, 2Q23 EPS of NT$2.92 set a record 2Q high | |||||||||||||
1H23 consolidated sales totaled NT$30,5458M. Consolidated 1H23 gross | |||||||||||||
Wah Lee Consolidated Entities | profit was NT$2,604M with 1H23 gross margin of 8.52% and 2Q23 gross | ||||||||||||
margin of 9.34%. 2Q23 GM was high due to the reversals of reserves for | |||||||||||||
include Wah Lee Taiwan and | |||||||||||||
subsidiaries in China, Singapore, | losses in slow-moving and write-off of inventory starting in | 2H22, as | |||||||||||
Thailand, Vietnam, and Indonesia. | |||||||||||||
inventory was gradually digested. 1H23 operating expense ratio was | |||||||||||||
IR Contact | 4.66%, which was at its normal level, and operating margin was 3.86%. | ||||||||||||
Eric Lin | Operating profit was NT$1,180M. | Non-operating profit was NT$237M, | |||||||||||
+886-2-2715-2087 ext.22061 | mainly contributed from long-term investment companies. Pretax profit | ||||||||||||
eric.lin@wahlee.com | |||||||||||||
totaled NT$1,417M. After tax and minority profit was NT$978M, with | |||||||||||||
1H23 EPS of NT$4.15. |
Wah Lee Industrial Corp. (3010.TT)
2023 2Q Management Report
August 22, 2023
2023 Outlook
Generally speaking, monthly sales in 1H23 showed a gradual, MoM growth pattern. 2Q23 sales showed a 12.44% QoQ growth from 1Q23 sales. This has signaled the gradual digestions of inventories at all levels of the tech industry. Most of Wah Lee's industry sectors, including engineering plastics, PCB/MB raw materials, FPD related sales, and green energy sector will see mild to strong HoH sales growth, indicating the resumption of consumer and enterprise spendings. The overall FY2023 sales will show a modest decline or a flat YoY from a year ago, and will see a YoY growth for the year of 2024 and onwards. We are confident that the general trends in the mega technology advancements will continue to move on. The generative AI (e.g. ChatGPT), HPC, 5G communications, EV/automobiles, smartphones, consumer electronics, high-end semiconductor manufacturing will eventually bring the general demands back to a positive growth cycle. Gradual digestions of customers' inventory levels will also lead to the return of technology raw material demands. Wah Lee is well-positioned in the raw material supply chain and will ride on the mega trends of technology advancements. We will be in the forefront of demand returns and closely monitor the inflection point of underlying economic cycles.
Operating Result (M) | 2020 | 2021 | 2022 | 1Q20 | 2Q20 | 3Q20 | 4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | 1Q22 | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 |
Total Rev | 59,081 | 70,515 | 73,570 | 12,353 | 14,836 | 16,160 | 15,731 | 16,284 | 16,866 | 18,756 | 18,610 | 19,510 | 18,336 | 19,149 | 16,575 | 14,378 | 16,167 |
Gross Profit | 4,801 | 5,983 | 5,567 | 1,005 | 1,195 | 1,287 | 1,313 | 1,438 | 1,496 | 1,572 | 1,476 | 1,558 | 1,428 | 1,438 | 1,143 | 1,094 | 1,510 |
Operating Profit | 2,108 | 3,073 | 2,643 | 425 | 545 | 636 | 501 | 726 | 758 | 804 | 784 | 802 | 697 | 704 | 440 | 431 | 749 |
After Tax Profit | 1,859 | 2,843 | 2,485 | 344 | 440 | 636 | 439 | 597 | 641 | 842 | 764 | 768 | 657 | 737 | 323 | 289 | 689 |
Shares Ourstanding | 231.40 | 236.02 | 236.02 | 231.40 | 231.40 | 231.40 | 231.40 | 231.40 | 231.40 | 236.02 | 236.02 | 236.02 | 236.02 | 236.02 | 236.02 | 236.02 | 236.02 |
EPS (NTD) | 8.03 | 12.05 | 10.53 | 1.49 | 1.90 | 2.75 | 1.89 | 2.53 | 2.71 | 3.57 | 3.24 | 3.26 | 2.78 | 3.12 | 1.37 | 1.22 | 2.92 |
Operating Result (%) | |||||||||||||||||
GP Margin | 8.1% | 8.5% | 7.6% | 8.1% | 8.1% | 8.0% | 8.3% | 8.8% | 8.9% | 8.4% | 7.9% | 8.0% | 7.8% | 7.5% | 6.9% | 7.6% | 9.3% |
OP Margin | 3.6% | 4.4% | 3.6% | 3.4% | 3.7% | 3.9% | 3.2% | 4.5% | 4.5% | 4.3% | 4.2% | 4.1% | 3.8% | 3.7% | 2.7% | 3.0% | 4.6% |
AT Profit Margin | 3.1% | 4.0% | 3.4% | 2.8% | 3.0% | 3.9% | 2.8% | 3.7% | 3.8% | 4.5% | 4.1% | 3.9% | 3.6% | 3.8% | 1.9% | 2.0% | 4.3% |
Growth % YoY | |||||||||||||||||
Sales YoY | 8.0% | 19.4% | 4.3% | 2.4% | 5.7% | 11.0% | 12.2% | 31.8% | 13.7% | 16.1% | 18.3% | 19.8% | 8.7% | 2.1% | -10.9% | -26.3% | -11.8% |
GP YoY | 14.7% | 24.6% | -7.0% | 9.5% | 10.5% | 11.5% | 27.2% | 43.1% | 25.2% | 22.1% | 12.4% | 8.3% | -4.5% | -8.5% | -22.6% | -29.8% | 5.7% |
OP YoY | 33.9% | 45.8% | -14.0% | 31.6% | 27.3% | 36.8% | 40.3% | 70.8% | 39.1% | 26.4% | 56.5% | 10.5% | -8.0% | -12.4% | -43.9% | -46.3% | 7.5% |
AT Profit YoY | 31.3% | 52.9% | -12.6% | 9.2% | 27.9% | 41.6% | 42.5% | 73.5% | 45.7% | 32.4% | 74.0% | 28.6% | 2.5% | -12.5% | -57.7% | -62.4% | 4.9% |
Safe Harbor Notice
Wah Lee Industrial Corp. (the Company) has made forward-looking statements in this report. The forward-looking statements contain information regarding, among other things, the Company's financial condition, future expansion plans and business strategies. The Company has based these forward-looking statements on its current expectations and projections about future events. Although the Company believes that these expectations and projections are reasonable, such forward-looking statements are inherently subject to risks, uncertainties and assumptions about it.
The Company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this report might not occur and the actual result could differ materially from those anticipated in these forward-looking statements.
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Wah Lee Industrial Corporation published this content on 22 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 August 2023 07:27:08 UTC.