Primax Electronics (TWSE: 4915) today announced its preliminary results for the second quarter ended June 30, 2023 (2Q23). Primax’s 2Q23 consolidated revenue reached NT$16.07 billion, up 10% quarter-over-quarter (QoQ). 2Q23 gross margin was 15.9%, a 2.4 percentage point (ppt) YoY improvement, while operating margin was 5%, a 0.5 ppt gain compared with same period last year. Net income was NT$699 million, which was a 26% QoQ increase, with earnings per share (EPS) of NT$1.55 for the second quarter of 2023.

Primax’s 1H23 consolidated revenue was NT$ 30.74 billion, down 20% year-over-year (YoY). 1H23 gross margin and operating margin were 15.5% and 4.5%, up 2.4 ppt and 0.5 ppt YoY respectively. Net income was NT$ 1.25 billion, which translates to an EPS of NT$2.78 for the first half of 2023.

For 2Q23 product breakdown, information products accounted for 45%, followed by smart lifestyle products were 32% and Auto/ Industrial AIoT related products were 23%. Primax has been expanding into high value-added products and optimizing its product mix, Auto/ Industrial AIoT products have significantly become more important to Primax, as the weighting has increased from 14% in 2Q21 to the 23% in 2Q23.

YY Hsiao, General Manager and CFO of Primax, stated that ”Second quarter revenue was impacted by slow market-demand in PC related and consumer audio products. However, with a better mix of Auto/AIoT segment, the gross margin has improved significantly. Moreover, strict cost controls have led to an improvement in operating margin, thus it further enhanced Primax’s profitability.

Moving into 3Q23, despite challenges on persistent weak macroeconomic conditions and inflation, Primax will continue to leverage off its 3 senses in 1 core capabilities which will improve our product portfolio and investing in innovative AI technology applications. Primax is expected to benefit from the growing trend of AI surveillance, which includes passenger safety, law enforcement safety, transportation safety, campus & community safety, and broader & access control. Furthermore, automotive electronics (ADAS/AVAS) and AR/VR/MR products will continue to inject new growth drivers for the company. Primax has taken precautionary measures to aggressively manage operational risks, maintain business resilience, and adapt to market changes in response to economic uncertainty.”