Lite-On SSD Division Expects Completion Of Q2, Vietnam New Plant Trial Production In Second Half

- Jan 31, 2020-

Lite-On Technology has actively implemented the lean focus plan in the past two years. It has successively dealt with non-profitable businesses and focused on the technological upgrading of existing business products. The first three quarters of 2019 have improved gross profit margin, operating profit margin, and net profit after tax. The company stated that the 2020 target is still to prioritize continued improvement in profits. The new Vietnam plant, which will be added in response to the trade war and customer demand, will also be completed in the first half of 2020 and trial production in the second half.


As for the solid-state storage (SSD) business unit (transferred to Toshiba Memory Holdings Corporation (TMCHD)) approved by the board of directors in the second half of 2019, the settlement is expected to be completed in the second quarter of 2020. At present, the SSD business unit accounts for less than 10% of the total revenue and is in a loss state. It is estimated that the completion of the SSD business will still have an impact on the overall revenue performance and profitability in 2020.


Looking forward to 2020, Lite-On pointed out that its core business will still focus on optoelectronics, cloud computing, AI artificial intelligence related application products and services. As 5G mobile communication technology is gradually on the road, it will drive demand for a larger number of communication power supplies, base station bureau / end related products, and so on.


In terms of sales, the adjustment of the layout in response to the trade war has been largely completed. In addition to the Taiwan factory's future focus on vehicle-related product manufacturing, the Thai factory will focus on optoelectronic products. The new Vietnam factory is expected to be completed in the first half of 2020 and begin to import equipment, and it is expected to enter trial production in the second half of 2020. Make contributions, planning products include Netcom and image related products.


Lite-On's revenue in December 2019 was 14.492 billion yuan (NT $, the same below). Optoelectronics revenue accounted for 16% of the total. Among them, the increase in LED component shipments led to continued growth in optoelectronics revenue compared to the same period last year. Revenue from the information products sector accounted for 70%. The company's full-year revenue in 2019 was 177.498 billion yuan, a year-on-year decrease of 14.07%, mainly due to the successive disposal of mobile phone cases and mobile phone camera business in recent years. However, due to the refocusing of core businesses including optoelectronics, cloud, and AI departments, profits were better. In the first three quarters of 2019, gross profit reached 15.1%, operating net profit was 5.1%, net profit after tax was 6.97 billion yuan, and earnings per share were 3 yuan, an annual increase. 28%.


As the board of directors passed the solid-state storage (SSD) business division to the 100% -owned subsidiary Lite-On in August / 30, 2019, the solid-state storage division will be transferred to Toshiba Memory Holdings in April 2020 by way of equity sale Corporation (TMCHD). It is estimated that it is not easy for Lite-On to recover growth in 2020, but the company's goal is to continue to improve its gross profit margin and profitability. (Source: Money DJ)