Primax Electronics Ltd. (4915 TT / 4915.TW) announced today its consolidated March revenue of NT$6.10 billion, which is a 12.2% year-on-year (YoY) decline and a 34.5% month-over-month (MoM) gain. The YoY decline came primarily from weakening consumer demand leading to customers’ inventory adjustments in 1Q23. For 1Q23, Primax’s consolidated revenue reached NT$14.68 billion, a 18.0% YoY decrease and a 21.6% quarter-over-quarter (QoQ) drop.

Despite weaker than expected revenue in March and a drop in consumer demand especially for PC and audio related products, Primax expects 1Q23 to be the trough and revenue should grow sequentially quarter-over-quarter (QoQ) starting from 2Q23. Thanks to a better product mix and a focus more on higher margin new business and products, Primax expects its profitability to actually see a YoY increase in 2023, with 1Q23 also being the trough. Aside from an expected YoY profitability growth in 2023, in preparation for the murky outlook in 1H23, Primax has also taken precautionary measures to aggressively manage its inventory, Opex ratio and cash flow since late of 2022, which would also help to improve Primax’s bottom-line.

Primax continues to focus on new businesses to improve profitability in 2023 and beyond. In the auto / industrial AIoT segment, growth in 2023 will likely come from surveillance and security related products, auto electronics (ADAS / AVAS), and B2B cameras which includes camera systems in unmanned stores, drones, and other new applications. Profit-wise, Primax’s 2023 net profit is expected to outpace its top-line growth rate, thanks largely to better product mix and increasing contributions from new businesses.