Primax Electronics Ltd. (4915 TT / 4915.TW) announced today its consolidated April revenue of NT$5.05 billion, which is a 20.7% year-on-year (YoY) decline and a 17.2% month-over-month (MoM) drop. The YoY decline came primarily from weakening consumer demand leading to customers’ inventory adjustments and delayed shipments. For January-April, Primax’s accumulated consolidated revenue reached NT$19.73 billion, a 18.7% YoY decrease.

Despite weaker than expected revenue in April 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 gross margin to see YoY improvements in 2023, which will likely offset some of the top-line weakness. Also, 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. Thanks to better product mix and increasing contributions from new businesses, Primax is expected to improve its net profit and continue to enhance its ROE in 2023.