Primax Electronics Ltd. (4915 TT / 4915.TW) announced today its consolidated November revenue of NT$6.81 billion, which is a 3.6% year-on-year (YoY) drop and a 1.0% month-on-month (MoM) decline. Accumulated YTD sales reached NT$64.96 billion, up 4.2% YoY. 

Traditionally 4Q has been the hottest season for Primax sales, and with component shortages gradually easing off, 4Q revenue should be a record high quarter for this year. With 9M21 EPS already reaching NT$4.00, and gross margin and operating margin likely to improve on a half-on-half (HoH) basis in 2H21, Primax expects 2H21 EPS to exceed the first half, likely reaching a historical high figure for the company in 2021.

Looking at 4Q21 as a whole, Primax expects the continuous improvement in operating margin. Revenue from Visual Technology, specifically car ADAS contributions will continue to increase, while the proportion from smartphones will continue to decline. The Intelligence Interface segment will remain stable from PC and gaming segments and demand for MFPs will rebound strongly in 4Q21. Police body cam growth rate will revitalize in 4Q21, shaking off the slow start in 1H21.

For 2022, for new businesses, after years of cultivating, Primax expects 2022 to be a harvest year, with revenue from these new products contributing significantly more to the top and bottom-line. Car electronics will continue to be the bright spot as ADAS camera modules for EVs will remain strong, Primax expects car ADAS revenue growth will outpace our major client Tesla’s growth rate in 2022, backed by wallet share gains from new project wins at multiple production sites. Starting from 2022, other major EV clients such as Rivian could also inject multiple years of growth to our car ADAS business. With component shortages easing off, policy body camera revenue should see strong growth in 2022 as shipment delays would be a non-issue going forward. Demand for AIoT products such as smart door lock, surveillance, and fitness products will also surge. Apart from the aforementioned growth drivers for 2022, Primax is also actively engaged with Metaverse’s major customers, with aims of becoming a long-term and reliable supplier of camera modules and that this new business would be a significant revenue contributor in the next few years.

Furthermore, Primax expects hybrid work to become a trend, which will continue to support demand for NBs. Coming off a lower base due to Covid, MFP/printer should also see strong demand in 2022. For the Audio segment, due to component shortages in 2H21, delayed shipment has led to less-than-expected revenue and earnings. Once component shortages have eased off and with more revenue contributions from higher margin professional audio products, Tymphany should see stronger revenue and margin recovery in 2022.

Primax is also upgrading its manufacturing capabilities by moving towards Smart Manufacturing via Industrial 4.0 concept. With Thailand’s plant now completed and in the final stages of relocation, Primax expects the new plant to be cost competitive soon and become an important strategic manufacturing site outside of China that provides flexibility and efficiency in the long-run.