Parade PCIe Gen 5 products are working with AMD, Broadcom, and Intel

Parallel, a high-speed signal transmission interface manufacturer, released its second quarter outlook. Due to the weakening demand for eDP products, the financial forecast is more conservative than market expectations. Chairman Zhao Jie said that the single-quarter consolidated revenue is approximately between US$85 million and US$94 million (the same unit below), which is about the same as the first quarter, with a gross profit margin of 40-43%, and consolidated operating expenses ranging from 20 million to 21 million.

Zhao Jie explained that the PS and SIPI series will have better growth, and the second quarter will be the peak season for notebook computers, and the market penetration rate of USB Type-C will increase. However, the demand for embedded DisplayPort (eDP) products is expected to weaken, which will suppress the second quarter's performance.

In terms of profit contribution of individual products, Zhao Jie analyzed that PS products currently have the highest gross profit margin, while T-Con's gross profit margin has slightly increased due to the gradual maturity of the product. As for the touch screen, due to the reduction in orders for low-profit products, he emphasized that Purui will focus on improving the gross profit margin of products such as smart watches, tablets, and panels, and continue to optimize the product portfolio.

In addition, Zhao Jie revealed that PCIe Gen4 is sending samples to important customers and is expected to enter the market by the end of 2019. Parade is actively working on the 16 transmission channels, and currently has few competitors. PCIe Gen 5 is cooperating with AMD, Broadcom and Intel to develop products. As for TDDI, it has been adopted by several smartphone customers and has the opportunity to gain a certain market share, with a good outlook for 2020.

In addition, regarding the impact of Intel's CPU shortage on the company, Zhao Jie responded that the current largest customer said that it only affected about 5% of revenue, and there was little direct impact on Parade. He also pointed out that the shortage should be alleviated in the second half of this year, and the company has new products entering the market. Based on past experience, the second half of the year will be better than the first half. At the same time, he is optimistic about the whole year.

Legal persons said that Apple, a major customer of Parade, continues to upgrade the specifications of its new iPad series and larger MacBooks, which will help improve its operating performance. In addition, if there is any new progress in Intel's PCIe 4 chipset testing in the fourth quarter of this year, it is expected to make an initial contribution to Parade by the end of 2019 or early 2020.

Purui held an earnings conference on the 2nd and announced its first quarter financial report. The consolidated revenue for the quarter was 93.72 million yuan, a decrease of 7.43% from the previous quarter and an increase of 16.2% from the previous year. The gross profit for the first quarter was 39.24 million yuan, a decrease of 7.5% from the previous quarter and an increase of 19.14% from the same period last year. The after-tax profit for the quarter was 18.59 million yuan, and the basic after-tax earnings per share was 0.24 yuan.