Primax Electronics Ltd. (4915 TT / 4915.TW) announced today its consolidated June revenue of NT$5.27 billion, a 16% year-over-year (YoY) gain and 3% month-over-month (MoM) increase. Accumulated YTD sales amounted to NT$33.61 billion, up 13% YoY. 

Due to Covid-19, work from home (WFH) demand including PC, gaming, and consumer sales showed high double-digit YoY growth, with home audio and conference products continuing their growth momentum and newly initiated professional audio projects also contributing to the top-line. For camera modules, car electronics is the bright spot as ADAS camera modules for EVs remain strong, while smartphone camera module revenue and mix is on the decline. Audio and visual technology sales declined on a YoY basis, as Primax is now aggressively cutting low-margin and non-profitable product lines. With gross margin increases from audio and visual technology products, the overall profitability of this segment should see substantial improvement. As a result, Primax’s gross margin and operating margin in 2Q 2021 will improve notably, with double-digit YoY and quarter-over-quarter (QoQ) growth.

Looking forward to 2Q 2021 profit, Primax expects gross margin and operating margin to exceed 1Q 2021, and significantly improve compared to 2Q 2020. Profitability from Intelligence Interface segment will remain stable thanks to intact PC and gaming demand. Profit from Visual Technology segment will show substantial YoY growth, thanks largely to rising car ADAS contributions. Profit from the Audio segment will grow significantly QoQ backed by improving client mix and increasing the ratio of high-end premium audios. 

Primax expects 2021 profit growth to outgrow revenue growth, due to optimizing product and customer mix, which would translate to an improvement in gross margin and operating margin.

Primax continues to strengthen its Three-Senses-In-One Strategy with the expansion of new smart devices to inject growth momentum. Primax will increase the proportion of high value-add new products mix gradually each year, with emphasis on areas such as AIOT and Smart Access.

  • Intelligence Interface segment: PC and gaming peripheral demand remains robust thanks to WFH, while high growth from new businesses such as smart home, docking, and wireless charging is also expected.
  • Visual Technology segment: ADAS for EVs would likely show a multifold growth thanks to an US EV customer. Primax is also focusing on increasing its higher margin non-smartphone camera module mix to improve margins.
  • Audio Segment: Chiefly due to consumer audio and video conference demand, coupled with newly initiated projects, audio profitability will improve significantly on a YoY basis.

Primax is also upgrading its manufacturing capabilities by moving towards Smart Manufacturing via Industrial 4.0 concept. We also expect our Thailand manufacturing site to be operational by the end of 4Q 2021.