Will Onpo benefit from the Huawei incident and step up its procurement of components?

As the Sino-US trade war continues to intensify, the market expects that power management IC manufacturer Onspur will benefit from Huawei's increased procurement of components from non-European and American manufacturers. However, General Manager Chen Zhiliang refuted this at the shareholders' meeting today (11), believing that Huawei's suppression may not be beneficial to Onspur.

Chen Zhiliang analyzed that in the past, Huawei required quality and did not care about price, and only listed Onpo and European and American manufacturers as cooperative suppliers; now under the ban, it needs to exclude European and American partners, and faced with operational pressure, it began to include manufacturers that used to score 40 or 60 points as suppliers. As small manufacturers are engaged in price wars, Onpo's gross profit margin will be under significant pressure.

However, he added that it seems that European and American manufacturers are still in the supply chain, but the situation after 90 days remains to be seen in the context of the Sino-US trade friction. Legal persons estimate that if price competition continues to be fierce, Angbao's quarterly gross profit margin of 30-40% may become the norm in the future.

In addition, when asked after the shareholders' meeting about his views on whether the industry's peak season would arrive as usual, Chen Zhiliang laughed a few times and passed it over, seeming to have reservations about the peak season, and bluntly said, "We currently don't see any signs of improvement in the economy in the second half of the year."

In its operating report, Angbao stated that due to the weak demand in the Chinese market under the trade war, revenue growth slowed down in the second half of last year, but it still continued its annual growth trend since its establishment. Looking ahead to this year, it is optimistic that product lines such as mobile phone fast charging, USB-PD and TV 3-in-1 chip modules will contribute to the company's revenue as the 5G, Internet of Things, artificial intelligence and automotive electronics fields emerge.

The company's consolidated revenue for the whole year last year was NT$4.786 billion (same unit below), an annual growth of 12.7%, net profit after tax was NT$767 million, and earnings per share after tax was NT$13.7. Today's shareholders' meeting also approved a cash dividend of NT$7.2 per share. Angbao's consolidated revenue in May was NT$423 million, a 9.5% increase from the previous month, but a decrease of 11.4% compared with the same period last year; the cumulative consolidated revenue in the first five months of this year was NT$1.782 billion, a decrease of 8.2% from the same period last year.