Primax Electronics Ltd. (4915 TT / 4915.TW) today announced its consolidated May revenues of NT$5.11 billion, down 2% on year-over-year and down 16% on month-over-month basis. Accumulated YTD sales amounted to NT$28.33bn, up 12% YoY. 

Due to cov-19, WFH demand including PC, gaming, and consumer sales showed YoY growth strength, while car electronics demand also continued to grow. Despite that audio and visual technology sales declined on YoY basis, this was chiefly due to overall strategy adjustment by aggressively decreasing low-margin and non-profitable product lines. As a result, thanks to gross margin improvement from audio and visual technology products, these two product lines’ overall profitability will improve substantially than a year ago. Looking forwards to 2Q, gross margin and operating margin will improve, Primax is confident that 2Q profit will show double-digit YoY and QoQ growth.

Looking forwards to 2Q21 revenue outlook, we anticipate positive YoY growth but QoQ growth rate could be affected by component shortage.  Due to Cov-19, WFH demand leads to overall strength in PC/Gaming/consumer segments, we thus expect double digit YoY growth in these segments. Car electronics demand continue to grow robustly( ADAS camera module applied to EV and advanced driving assistance); but smartphone camera module revenue and mix will decrease. Home audio and conference products demand carry over their growth momentum, while new professional audio projects kick off; audio revenue will grow QoQ slightly. Moreover, overall higher margin audio revenue mix will increase substantially versus 1Q20.

Looking forwards to 2Q21 profit outlook, we expect to improve gross margin and operating margin(expect higher than 1Q), thus, 2Q21 overall gross margin and operating margin will see significant improvement compared to 2Q20. Profitability from Intelligence interface segment will remain stable thanks to intact PC/gaming demand. Profit from Visual Technology segment will show substantial YoY growth this is chiefly due to rising car ADAS contribution.  Profit from Audio segment will grow significantly over 1Q21 level backed by improving customer structure and increasing high-end premium audio mix. 

Primax expects that 2021 Profit growth rate will outgrow Revenue Growth rate, due to optimizing product and customer mix, coupled with gross margin and operating margin improvement.

Primax continues to deepen three Senses in one strategy and expands new smart devices to inject growth momentum. Primax will increase high value-added new products mix gradually each year, such as AIOT and Smart Access.

• Intelligence Interface segment :PC and gaming peripheral demand remain robust thanks to WFH(work from home), High growth from new business such as SmartHome, Docking, and Wireless charging
• Visual Technology segment : ADAS (apply to EV and advanced driving assistance system) likely show multiple growth thanks to US based EV customer. Increase higher margin non-smartphone camera module mix
• Audio Segment:  Chiefly due to consumer audio and video conference demands, coupled with new projects kick-off, audio profitability will improve significantly on YoY basis.

Primax also upgrades our manufacturing capabilities by moving towards Smart Manufacturing via Industrial 4.0 concept. We also expect that our Thailand manufacturing site will be ready  and move in by end of 4Q21.