Chicony Electronics (2385.TT) reports NT$4.10 EPS for 1H21 with 18% YoY increase

Chicony Electronics (2385.TT) reports 1H21 results on August 6th, 2021. Chicony’s EPS was NT$1.87 for 2Q21, and NT$4.10 for 1H21.

1H21 Revenue Increased 17% YoY Mainly Driven by Strong Notebook Demand

Thanks to the very strong demand in notebook and gaming PC products, 1H21 revenue growth was 17% YoY. Notebook components revenue, including keyboard, camera module and power adaptor, increased 23% YoY in 1H21. Gaming PC applications revenue, including keyboard and adaptor, continued to grow 47% YoY. In 1H21, the shipment of back-light notebook keyboard increased 32% YoY, showing that the demand for back-light keyboard is trending up.

1H21 OPM was 7.3% and EPS was NT$4.10 with 18% YoY increase

In 1H21, gross margin was 17.4%, similar to the company’s expectation. The GPM gap between 1H21 and 1H20 was mainly due to unfavorable F/X, product mix, labor cost increase and material price hike. SG&A came to 10.1%, pretty much in line with expectation, so that leaves operating margin at 7.3%. 1H21 EPS was NT$4.10, 18% higher than in 1H20.

2H21 Revenue to be Driven by Strong Consumer Product Demand

A series of AI-enabled image devices for consumer electronics products are scheduled to be rolled out in 2H21. Chicony has leading market share in smart home image devices, and new models of IP cam and doorbell cam will soon be launched in 2H21. Aside from smart home, Chicony has planned to expand to many new fields this year, such as DMS(driver monitoring system) for automotive, corporate surveillance IP cam and video conference system for enterprise market, disposable endoscope for health sector, sports DV and image devices for smart gym. In addition to the numerous image product lines, gaming keyboard and gaming NB adaptors are expected to perform well in 2H21 thanks to the growing gaming market. New models of keyboard for 2-in-1 devices will be launched in the end of 3Q21. In notebook market, although demand for Chromebook peaked in 2Q, but we’ve seen signs of growing demand for commercial notebook with LED back-light keyboard, and the penetration rate of LED back-light module is rising. With stronger demand for gaming keyboard, 2-in-1 device keyboard, and LED back-light notebook keyboard, Chicony expects to have higher ASP for keyboards which benefits the company’s profit.

Revenue to Peak in 3Q21

Thanks to the launch of multiple image products starting in 3Q21, the image product revenue is expected to outgrow keyboard and power revenue. Although the shortage of IC components remains to be the biggest uncertainty, Chicony is confident that quarterly revenue will peak in 3Q21, similar to the pattern in previous years. 3