Wistron ITS, the software arm of Wistron, resiliently navigates challenges amid global uncertainties. CEO Hsiao Ching acknowledges the challenges presented by "black swan" and "gray rhino" events yet remains optimistic about Wistron ITS' growth prospects in 2024. Factors such as sustained demand for AI and new energy vehicles provide a foundation for the anticipated growth.
Wistron ITS has benefited from the continued vibrancy in the networking and new energy electric vehicle sectors, driving profits to new heights in the first three quarters. Despite recent economic uncertainties impacting customer IT expenditures, both the fourth quarter of 2023 and the entirety of 2024 are expected to witness sustained revenue growth.
Hsiao Ching emphasizes that the core lies not just in business expansion but in delivery. In response to escalating demands, Wistron ITS has surpassed a significant milestone, surpassing 10,000 employees. Currently, the majority of the revenue comes from China, and future development efforts will be amplified in Taiwan, North America, Southeast Asia, and other regions.
AI also plays a pivotal role in Wistron ITS' growth story, constituting 10% of its current revenue. In just two months, this figure increased by 2 percentage points, showcasing robust growth potential. AI-related ventures boast better profit margins, contributing to an enhanced overall profit structure.
Wistron ITS CFO Phoebe Chang explains that typical gross profit margins in the software outsourcing industry range from 20% to 25%. While the third-quarter gross profit margin stands at 20.5%, which is slightly below the industry average due to significant volume from a single network customer, future operations will focus on higher-margin areas such as AI, new energy vehicles, and finance. The aim is to maintain a gross profit margin of 20% or more.
As the competition intensifies in the new energy vehicle market, Wistron ITS remains vigilant. Chang notes that closely monitoring the ranking of new energy vehicle sales in China is crucial. This strategic approach positions Wistron ITS to expand its market share with existing customers while exercising caution or potentially exiting with newer customers. The competitive dynamics of the new energy vehicle market, with a foreseeable long-term growth, make Wistron ITS optimistic about sustaining double-digit growth in this business segment.
Article translated by Jerry Chen
