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LITEON Technology reported the first quarter consolidated sales of NT$34.2 billion, supported by continuous growth from power management in cloud computing, automotive electronics and 5G networking. Thanks to the optimization of product mix, customer portfolio, and operational efficiency, the gross margin reached 18.8%, up 1.7ppt Y-o-Y; the operating margin was 6.3%, of that, the R&D expense, out of Operating ones, has accounted for 5.5% of the first quarter sales, up near 20%Y-o-Y, mainly focus on the power management for cloud computing, 5G, automotive electronics and new businesses. The net profits in the first quarter were NT$2.4 billion with EPS of NT$1.03, up 12% Y-o-Y. Meanwhile, as approved by the Board of LITEON, the annual general meeting will be held on May 17th, 2023.
Enhanced Return on Invested Capital (ROIC) Effectively Created New Business Resources
“In recent years, LITEON has actively pursued transformation, resulting in significantly optimization to operation and profitability. By increasing the proportion of high-growth and high-value businesses, actively managing working capital, and continuously optimizing invested capital and operational efficiency, the return on invested capital (ROIC) increased from 15% in 2018 to 43% in 2022. This means that LITEON has generated resources for sustainable development and stable growth in new businesses through profits and returns from its investment in core businesses. Moving forward, LITEON will launch more strategic investments to continuously enhance the operational efficiency of its core businesses, ensuring that our long-term ROIC remains both stable and sustainable,” said Mr. Anson Chiu, President of LITEON Technology.
Optoelectronics and Cloud & AIoT Businesses Accounted for Nearly 60% of Q1 Revenue; Accelerating the Development of New Model of Advanced Power Management for AI Servers
“In the first quarter of 2023, we have already seen the revenue generated from Optoelectronics and Cloud & AIoT businesses increased to 58%, steadily approaching our goal of 4/3/3 business portfolio (that is, 40% of revenue from IT&CE, 30% from Cloud & AIoT, and 30% from Optoelectronics & Automotive Electronics). In particular, as AI applications become more widespread, there is a growing demand for high-end power products for GPU servers. We are optimistic about the prospects of the AI/GPU server market over the next 2-3 years. With our accumulated expertise in GPU power application scenarios and technology, LITEON has obtained advanced and leading advantages in the development of the next generation of GPU server power. Going forward, we will continue to develop high-power products of 6KW to 8KW as well as highly efficient power products exceeding the titanium efficiency level (97.5%) to meet the energy-saving requirements of data centers,” said Mr. Anson Chiu, President of LITEON Technology.
Looking Forward: Increasing Added Value and Profitability of Core Businesses through Expanding R&D Capabilities, and Advancing Overseas Capacity and Diversity
LITEON actively responds to challenges of market and environment, continuously expanding its R&D capabilities, launching high-value, high-growth product lines that have gained recognition in new markets, industries, and customers. We remain optimistic about long-term operating prospects. Looking to the second quarter, we expect the demand for power management for cloud computing, automotive electronics, and 5G network communications to contribute to overall operating performance. Additionally, we expect continued growth in the shipment of high-end products in IT&CE sector and diversified product development. Looking to 2023, high-growth and high-value product lines such as AI servers, ADAS modules, electric vehicle charging solutions, and 5G networks are expected to drive revenue growth on a quarterly basis. Furthermore, this year, LITEON aims to strengthen regional sales capabilities, accelerate the development of key markets such as the United States, Japan, and Southeast Asia, and expand overseas manufacturing capabilities in Southeast Asia and the US to elevate operating performance and maintain profitable growth.