Wah Lee Industrial Corp. (3010.TT)
2023 4Q Management Report
March 19, 2024
Company Basic Information | FY2023 Consolidated Results Announcement | ||||||||||||||
Closing Price (18/03/2024) | NT$108.0 | Wah Lee's FY2023 sales reached | NT$66,782 million, a 9.23% | YoY | |||||||||||
decline amid gradual inventory digestion among customers and sluggish | |||||||||||||||
52 WK High | NT$116.0 | ||||||||||||||
macro-economic condition. | WL's | sales performance was relatively | |||||||||||||
52 WK Low | NT$79.4 | ||||||||||||||
stable as compared to 12-30% sales decline among the distributors. | |||||||||||||||
Book Value/share | NT$78.6 | ||||||||||||||
Shares on Issue (M) | 236.2 | Information Communication | Technology | 12.38% YoY decline: | ICT | ||||||||||
Market Cap (USD M) | 832 | sector's sales was adversely | affected by | the slow demands | from | ||||||||||
QFII Holding (%) | 13.8 | ||||||||||||||
consumer electronics, smartphones, and home appliances, as a result of | |||||||||||||||
Monthly Avg Daily Turn | NT$100M | ||||||||||||||
the inflation and high interest rates. It's also hindered by the | |||||||||||||||
Key Financial Indicators | geopolitical conflicts to move productions out of China and Chinese | ||||||||||||||
people's own conservative consumption behaviors after the Covid. | |||||||||||||||
2021 | 2022 | 2023 | |||||||||||||
Semiconductor 7.87% YoY decline: While Wah Lee's leading foundry | |||||||||||||||
ROE | 19.1% | 15.0% | 11.9% | ||||||||||||
Debt/Asset | 61.0% | 62.0% | 59.0% | customer maintained high capacity utilization mostly because of the | |||||||||||
Cash Conversion | advanced manufacturing nodes, the overall semi industry was still faced | ||||||||||||||
Days | 76.5 | 76.0 | 81.8 | ||||||||||||
with high inventory levels from the demand sides. It is expected the | |||||||||||||||
inventory de-stocking of chips will last over the 1H of this year. | |||||||||||||||
3010 WL | Price Chart (1 yr) | FPD 5.24% YoY decline: The FPD FY2023 sales showed a YoY decline | |||||||||||||
because in the beginning of 2022 the electronic whiteboards were | |||||||||||||||
shipped in large quantities to avoid the delay of delivery due to the | |||||||||||||||
Chinese New Year holidays. The electronic whiteboard sales had | |||||||||||||||
gradually returned in 2H23. FPD 4Q23 quarterly sales grew 19.4% | |||||||||||||||
YoY. | |||||||||||||||
Green Energy 42.47% YoY decline: The mainland Chinese government | |||||||||||||||
phased out their EV subsidy policy starting in 2023. The rush to | |||||||||||||||
Product Mix (FY2023) | purchase EVs before the phase out has made the sales of li-battery | ||||||||||||||
cathode and anode materials hiked up the demand in 2H 2022 resulting | |||||||||||||||
in the YoY decline of the green energy sector in 2023. On the other | |||||||||||||||
hand, Wah Lee's solar power stations has reached 65MW in total | |||||||||||||||
capacity by the end of 2023 and has delivered stable sales and profits | |||||||||||||||
for the group. | |||||||||||||||
FY2023 EPS: NT$8.96 and a cash dividend of NT$5.2/share was | |||||||||||||||
announced, dividend payout ratio was 58% | |||||||||||||||
Full year 2023 consolidated sales totaled NT$66,782M. FY2023 gross | |||||||||||||||
profit was NT$5,526M with gross margin of 8.28%. FY23 GM was higher | |||||||||||||||
than the FY22 GM of 7.57% mostly benefitted from the reversals of | |||||||||||||||
reserves for losses in slow-moving and write-off of inventory starting in | |||||||||||||||
Wah Lee Consolidated Entities | 2H22, as inventory was gradually digested along the quarters in 2023. | ||||||||||||||
include Wah Lee Taiwan and | FY2023 operating expense ratio was 4.53%, which was higher than a year | ||||||||||||||
subsidiaries in China, Singapore, | |||||||||||||||
Thailand, Vietnam, and Indonesia. | ago as travel and entertainment expenses increased after the end of Covid, | ||||||||||||||
IR Contact | and operating margin was | 3.75%. | Operating profit was NT$2,501M. | ||||||||||||
Non-operating profit was NT$577M, mainly contributed from long-term | |||||||||||||||
Eric Lin | |||||||||||||||
+886-2-2715-2087 ext.22061 | investment companies. Pretax profit totaled NT$3,078M. FY2023 after tax | ||||||||||||||
eric.lin@wahlee.com | and minority profit was NT$2,113M, with EPS of NT$8.96. A cash | ||||||||||||||
dividend of NT$5.2/share was proposed by the Board and will be approved | |||||||||||||||
in the AGM on May 28. |
Wah Lee Industrial Corp. (3010.TT)
2023 4Q Management Report
March 19, 2024
2024 Outlook
We are confident the year of 2024 will be a year of recovery. Due to the low basis of monthly sales in 2023, the cumulative Jan.-Feb. 2024 consolidated sales has grown by 22.53% YoY. Wah Lee's geographic expansions were targeted at the fast-growing markets: China's GDP growth target for 2024 is 5.3%; ASEAN countries' overall GDP growth is expected to be 4.9%; India's GDP growth aims for 7%; while US, Japan, Mexico, and Europe markets all expect to have satisfactory growth rates. Wah Lee plans to aggressively expand its market shares in these major markets. From the application's perspectives, smartphones and NB, PC are expected to see sales volume to resume growth momentum in 2024. With the advent of generative AI, the consumer and enterprise AI sectors will both see exponential demand growths within the next few years. According to industry research, AI servers will grow at a CAGR of 45% within the year from 2022-2026. Wah Lee provides a comprehensive portfolio of raw materials for AI servers or other high performance computing or communication device. From high-end engineering plastics that go into the connectors, sockets for GPU/CPU, and chassis, to the dry films and CCLs required for the production of high-end PCB for AI servers or switches. Furthermore, semiconductor raw materials including photoresist, CMP slurry, bulk chemicals, specialty gases, and spare parts were comprehensively provided by Wah Lee to foundry and DRAM makers for making all the critical GPU/CPU/Memory chips that will make up for the backbone of an AI server or other AI device. EV market is another high potential growth area. By the year of 2030, EV is expected to grow at a CAGR of 17.3%. Wah Lee has already provided GaN and SiC components and device that are required in the high electricity voltage working environment of EV and charging stations. The related 3rd generation compound semiconductor sales in Wah Lee has grown by 46% YoY in 2023. Wah Lee has well positioned itself to lead in the continuous development of mega technology trends in the modern world. We will periodically update our latest progress in different frontiers of industries to investors and shareholders.
Operating Result (M) | 2021 | 2022 | 2023 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | 1Q22 | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 | 4Q23 |
Total Rev | 70,515 | 73,570 | 66,782 | 16,284 | 16,866 | 18,756 | 18,610 | 19,510 | 18,336 | 19,149 | 16,575 | 14,378 | 16,167 | 19,019 | 17,218 |
Gross Profit | 5,983 | 5,567 | 5,526 | 1,438 | 1,496 | 1,572 | 1,476 | 1,558 | 1,428 | 1,438 | 1,143 | 1,094 | 1,510 | 1,548 | 1,374 |
Operating Profit | 3,073 | 2,643 | 2,502 | 726 | 758 | 804 | 784 | 802 | 697 | 704 | 440 | 431 | 749 | 699 | 623 |
After Tax Profit | 2,843 | 2,485 | 2,114 | 597 | 641 | 842 | 764 | 768 | 657 | 737 | 323 | 289 | 689 | 712 | 423 |
Shares Ourstanding | 236.02 | 236.02 | 236.24 | 231.40 | 231.40 | 236.02 | 236.02 | 236.02 | 236.02 | 236.02 | 236.02 | 236.02 | 236.02 | 236.02 | 236.24 |
EPS (NTD) | 12.05 | 10.53 | 8.96 | 2.53 | 2.71 | 3.57 | 3.24 | 3.26 | 2.78 | 3.12 | 1.37 | 1.22 | 2.92 | 3.02 | 1.80 |
Operating Result (%) | |||||||||||||||
GP Margin | 8.5% | 7.6% | 8.3% | 8.8% | 8.9% | 8.4% | 7.9% | 8.0% | 7.8% | 7.5% | 6.9% | 7.6% | 9.3% | 8.1% | 8.0% |
OP Margin | 4.4% | 3.6% | 3.7% | 4.5% | 4.5% | 4.3% | 4.2% | 4.1% | 3.8% | 3.7% | 2.7% | 3.0% | 4.6% | 3.7% | 3.6% |
AT Profit Margin | 4.0% | 3.4% | 3.2% | 3.7% | 3.8% | 4.5% | 4.1% | 3.9% | 3.6% | 3.8% | 1.9% | 2.0% | 4.3% | 3.7% | 2.5% |
Growth % YoY | |||||||||||||||
Sales YoY | 19.4% | 4.3% | -9.2% | 31.8% | 13.7% | 16.1% | 18.3% | 19.8% | 8.7% | 2.1% | -10.9% | -26.3% | -11.8% | -0.7% | 3.9% |
GP YoY | 24.6% | -7.0% | -0.7% | 43.1% | 25.2% | 22.1% | 12.4% | 8.3% | -4.5% | -8.5% | -22.6% | -29.8% | 5.7% | 7.6% | 20.2% |
OP YoY | 45.8% | -14.0% | -5.3% | 70.8% | 39.1% | 26.4% | 56.5% | 10.5% | -8.0% | -12.4% | -43.9% | -46.3% | 7.5% | -0.7% | 41.6% |
AT Profit YoY | 52.9% | -12.6% | -14.9% | 73.5% | 45.7% | 32.4% | 74.0% | 28.6% | 2.5% | -12.5% | -57.7% | -62.4% | 4.9% | -3.4% | 31.0% |
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 19 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 March 2024 04:08:00 UTC.