source: Taipei Times news
Yageo Corp, which makes passive components, yesterday said it plans to raise prices by between 8 and 10 percent to reflect rising raw material costs and the New Taiwan dollar’s appreciation.
The hikes will be applicable to 30 to 40 percent of the company’s multilayer ceramic capacitor and chip resistor products, a Yageo investor relations officials said by telephone.
“The price hikes primarily reflect increasing costs,” the official said.
Yageo’s planned price hikes were reported by the Chinese-language Economic Daily News earlier yesterday. Yageo shares rose 4.09 percent to close at NT$96.8 in Taipei trading, after touching a two-decade high of NT$98 during the session. The stock has surged about 64 percent since the beginning of this year, Taiwan Stock Exchange data showed.
The official said that a 5 to 6 percent increase in raw material prices and the appreciation of the NT dollar caused the price hikes. Every NT$0.1 appreciation of the NT dollar against the US dollar erodes the firm’s gross margin by about 0.2 percentage points, the official said. Gross margin dropped 0.3 percentage points to 25.1 percent in the first quarter from a quarter earlier, the company’s financial report showed. Yageo booked a foreign-exchange loss of NT$371 million (US$12.22 million) for the first quarter.
The company might consider another price hike given growing demand from China, the official said, without elaborating. Yageo counts Chinese smartphone makers Huawei Technologies Co, Oppo Mobile Telecommunications Corp and Xiaomi Corp among its clients.
“Customer demand is recovering as Chinese smartphone vendors launch their new mid-to-high-end handsets in the second quarter, following the completion of inventory digestion over the previous two quarters,” the official said. Apart from smartphones, demand for components used in notebook computers, as well as the automotive and industrial segments is also resilient, the official said. “I will not rule out the possibly of hiking prices further as supply becomes tighter,” the official added.
Yageo on Monday reported net profit of NT$818 million for the first quarter. That represented an about 38 percent decline from NT$1.33 billion in the final quarter of last year.
On an annual basis, net profit inched up about 1 percent from NT$810 million a year earlier. Revenue grew 2 percent quarter-on-quarter, or 0.5 percent year-on-year, to NT$7.35 billion last quarter, the report showed.
