More Fallout
While we down note all of the changes in forecasts that have been occurring as a result of the inflationary macro environment and the lingering effects of COVID-19, especially in China, we do mention those we think are unusual and in the case of Asustek (2357.TT), a Taiwan based laptop producer among the top 10 globally. Last month the company reported a 14% sequential decline in net profits last quarter and predicted a 10% drop in PC shipments this over last, but continued to affirm its target that its revenue would increase by 10% y/y, despite the industry slowdown and its quarterly weakness.
It seems that now, roughly six weeks later, the company is revising its target from up 10% y/y to flat y/y, although stating that it will, still outperform the industry by 10%, leaving its ‘cautious optimism’ about the 2nd half, where it was counting on back-to-school, holiday shopping, and pent-up demand to help it meet its former targets. The company gets ~66% of its revenue from PCs with the remainder from components such as motherboards and graphics cards, which it expects to decline 10% to 15%, against the 10% decline for PCs in 2Q.
It seems that now, roughly six weeks later, the company is revising its target from up 10% y/y to flat y/y, although stating that it will, still outperform the industry by 10%, leaving its ‘cautious optimism’ about the 2nd half, where it was counting on back-to-school, holiday shopping, and pent-up demand to help it meet its former targets. The company gets ~66% of its revenue from PCs with the remainder from components such as motherboards and graphics cards, which it expects to decline 10% to 15%, against the 10% decline for PCs in 2Q.
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