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Darfon Electronics Eyes Growth in IT and Green Energy Sectors, Despite Challenges

Darfon reports a 15% decline in first-quarter revenue but sees potential growth in IT projects and green energy business restructuring in the coming quarters
Taiwan
d 8163.TW Mid and Small Cap 2000
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Darfon Electronics, a key player in the electronic components industry, today announced a mixed first-quarter performance alongside optimistic projections for its IT and green energy sectors. General Manager Tsai Yao-Kun highlighted expectations for quarter-on-quarter growth starting from Q2, despite a recent decline.

The company reported first-quarter revenues of NT$5.11 billion, marking a 15% decrease from the high base period last year. However, gross profit margin showed improvement, rising to 19.1%. Net profit after tax stood at NT$144 million, with an after-tax earnings per share (EPS) of NT$0.52, slightly up from the previous year.

A significant driver of the quarter’s performance was increased demand from keyboard customers, which helped mitigate some of the destocking pressures in the green energy sector. Darfon’s core green energy business, centered around electric-assisted bicycles (E-Bike), is expected to face continued destocking challenges until the latter half of the year or early next year.

Despite these challenges, Darfon is actively preparing for a rebound in the green energy market. The company is advancing its production capacity in Southeast Asia and optimizing its assembly plant operations for better competitiveness and gross profit margins. Notably, the new Nanyue factory, along with the Taiyu frame factory and the Dayu Electric Power battery factory, are set to play central roles in the company’s strategic development due to their strong performance metrics.

In the IT sector, Tsai remains positive about the demand outlook. Order assessments indicate that the second quarter will witness growth compared to Q1, countering typical seasonal slowness. The North Vietnam factory is set to ramp up production, with integrated production strategies and enhanced cooperation with the Thai factory expected to yield synergistic benefits.

Looking ahead, Darfon anticipates that the upcoming upgrades in the Windows operating system and the launch of AI PCs will drive increased demand for NBs and PCs. This shift is expected to boost shipments of keyboards and other new products, ensuring steady growth in the IT division.

Darfon’s strategic adjustments and expansions across its operational sectors underscore its proactive approach to navigating current market challenges while setting the stage for future growth.

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