Connector maker Alltop Technology plans to increase orders for non-notebook applications to diversify product portfolio and improve profit margin, according to the Taiwan-based company. Non-notebook product shipments from January through September constituted 14% of revenues, up from 9% in 2009.
With demand picking up since mid-September and customers handing out rush orders again, Alltop expects a modest sequential growth for fourth-quarter revenues. For 2011, thanks to shipments for non-notebook applications such as battery packaging and high-performance power supplies, both revenues and profit should see improvements with a 20% increase in overall shipments as target.
Notebook connectors accounted for 86% of Alltop's third-quarter revenues. Due to weak demand from the notebook sector during the period and falling prices, the company saw consolidated revenues drop 2% on year to NT$1.756 billion (US$57.06 million), and net profit slip 17.8% on year to NT$282 million or NT$5.18 a share.
Alltop is both optimistic and conservative about the rest of 2010. Though demand has obviously rebounded since September and shipments are on the rise, falling prices as well as rush orders causing shipment delays could become problems down the line.
In terms of shipments, Alltop projects a 20% growth for 2011, but profitability could be impacted by price slash and cost increase. Non-notebook applications will become the company's main revenue source in the future.
Article translated by Willie Teng
