Benefiting by the increase in the utilization rate, Sunflex Tech Co. Ltd. (Sunflex), a flexible board manufacturer, enjoyed a growth in gross profit of 8.5% in Q3. Thanks to the need for mobile applications, revenue in Q4 is expected to grow slightly compared to the last quarter. Looking at 2018, the main catalyst for growth remains cell phone and automotive applications. Due to a low base this year, next year’s growth remains high.

 

   Sunflex has capital of NT$669 million and the monthly capacity of 50,000 square meters, with the main capacity from Taiwan and Shenzhen. In terms of Sunflex’s product structure in Q1~Q3, touch panels, LCM modules, motherboards, and LED Light Bars accounted for 11%, 17%, 58%, and 14% respectively; in terms of applications, mobile phones, NB, and industrial control/automobile/medicine accounted for 38%, 30%, and 32% respectively. Sunflex enjoyed a growth in gross profit of 8.5% and reached 24% in Q3, with a profit after tax of NT$37 million. Due to the increased pull-in of cell phone customers, the gross profit rose significantly, leading to an increase in the utilization rate (over 70%).

 

  Looking at Q4, monthly revenue in October reached NT$90 million due to the shortage of passive components. Revenue in Q4 is expected to grow compared to Q3, due to the continuously increasing pull-in of cell phone products, including a domestic brand A and international brands N and S. If a considerable utilization rate is maintained, gross profit should remain flat compared to the last quarter. Currently, Sunflex received more gross profit from Customer N, and such a situation will last until Q118 and Q218.

 

 Looking at 2018, the main catalyst for growth remains cell phone and automotive applications, especially with a relatively large quantity of cell phone products. Brand N re-entered the market this year to test the water and received a good response; in 2018, Brand N expects continuous growth and there is also great room for growth in market shares in emerging countries; other brands also reported a stable growth. The automotive products, including LCM module/LED Light Bars and touch panels, are expected to grow next year. In terms of automotive applications, rear-view mirrors, central control panel screens, GPS, and sub-screens & head-up displays on dashboards accounted for 15% this year and are expected to grow next year. (Source: Money DJ)