Primax Electronics Ltd. (4915 TT / 4915.TW) announced today its consolidated 2Q 2021 revenue of NT$16.45 billion, which is a 1% YoY gain, while net profit reached NT$627 million (+33% YoY), translating into an EPS of NTD 1.37 (+21% YoY). Gross margin for 2Q 2021 reached 13.3% on better product mix, which is 2.0 ppt higher than the same quarter last year, and operating margin was 4.0%, up 1.6 ppt YoY.

Primax’s 1H 2021 revenue came in at NT$33.61 billion, a 13% YoY increase. Thanks to robust demand for PC, gaming, and car ADAS camera, Primax’s 1H 2021 EPS reached NT$2.50, up 43% YoY.

In terms of sales breakdown, interface products accounted for 52% of total revenue in 2Q 2021, followed by audio (28%), visual (14%) and business equipment (6%). Interface products continue to be the most significant contributor to Primax’s revenue, as PC and gaming products were fueled by strong work from home (WFH) demand in 2Q 2021 and new smart home products also chipped in to the top-line. For our audio business, Primax has aggressively cut down non-profitable product lines, and the focus in 2Q 2021 was on higher margin professional audio, premium consumer products and new audio projects that would render better growth and returns in the future. For visual products, demand remained strong from car ADAS, while smartphone camera module revenue and mix had declined.

Looking forward to 2H 2021, Primax expects margins to continue their upward trajectory, as a combination of an increase of higher-margin products and a decrease of profit losing items would continue to lift margins. As Primax diverts away from low-margin businesses, 2021 profit growth should outstrip revenue growth, due to optimizing product and customer mix, which would translate to improved profitability. From a business segment perspective, profitability for visual products in 2H 2021 will maintain at steady high levels due to margin resilience and product mix optimization, as Smart Access, wireless charging, docking, and optomechanics electronics would all be contributing to the bottom-line. For visual products, profit growth in 2H 2021 would come mainly from an increase of car ADAS contributions, and Primax’s profit from its visual business would likely see substantial YoY growth. For Primax’s audio business, with revenue expected to see a jump HoH in 2H 2021, profit should grow significantly the second half of the year. In addition, the improvement in customer mix and an increase of high-end premium audios, should translate into higher YoY gross margin in 2H 2021.