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Compal Announces Modest Profit Growth and Positive Dividend, Eyes Expansion in AI Server Market

Amid a challenging market, Compal's strategic focus on AI servers and non-PC products forecasts a robust performance uplift, with dividends reflecting steady financial health
c 2324.TW Mid and Small Cap 2000
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Compal Electronics unveiled its 2023 financial results, highlighting a net profit after tax of 7.668 billion yuan, a 5% increase from the previous year, with earnings per share at 1.76 yuan. The board approved a dividend payout of 1.2 yuan per share, reflecting the company’s strong financial health and commitment to shareholder returns. General Manager Weng Zongbin shared an optimistic outlook for the server division, especially in AI servers, expected to drive significant growth within the server segment, projected at 30-40%.

The company’s product lines exhibit varying growth prospects, with non-PC products expected to achieve double-digit growth annually, contrasting with a single-digit increase in PC-related revenues. This shift indicates a reconfiguration of revenue streams, transitioning from a PC-centric to a more diversified product portfolio.

The initial half of the year predicts double-digit declines across both PC and non-PC segments, but the latter half is expected to improve, spurred by reduced inflation, economic rebound, and the introduction of AI-integrated PCs. This new product introduction, led by giants like Microsoft, Super Micro, and Intel, aims to rejuvenate the PC market and increase average selling prices, marking a significant shift for the upcoming year.

Compal’s Q4 2023 performance demonstrated resilience, with a minor decrease in quarterly revenue but enhanced profitability, showcasing effective market navigation. The annual figures also reflected a strategic adjustment towards higher-margin offerings and improved operational efficiency, despite a revenue decline.

Compal’s strategic focus on burgeoning sectors like AI servers and a balanced product portfolio aligns with evolving tech trends, aiming to strengthen its market position and profitability. The emphasis on AI and server technologies, combined with a versatile product strategy, positions Compal to capitalize on emerging technology trends and market demands, ensuring the company’s continued growth and relevance in the tech landscape.

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