Hana resumes investment after impressive Q2

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Hana resumes investment after impressive Q2 results

Writer: NAREERAT WIRIYAPONG

Published: 17/08/2009 at 12:00 AM

Newspaper section: Business

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Hana Microelectronics Plc, the country's biggest semiconductor packager, has started investing again and taking on staff to meet rising orders after posting better-than-expected financial results in the second quarter.

 

About 350 million to 500 million baht will be spent on new production equipment later this year, mainly in the integrated circuit (IC) division. Hana is also looking to hire 600 new staff, said chief financial officer Terry Weir.

 

"Hana will invest and hire labour to build the products according to customer demand. Therefore, as the recovery takes place and new products are ordered by our customers, we will have to increase investment to be able to meet that demand in the second half of the year," he said.

 

The SET-listed electronic parts maker currently employs about 8,000 people and is running at about 80% of capacity.

 

Customer inventory replenishment and partial economic recovery enabled Hana to perform better in the second quarter than in the first three months, and to beat its own expectations for the first half, said Mr Weir.

 

In the second quarter, Hana's net profit of 504 million baht was down only 7.6% year-on-year and up 151% from 201 million baht in the first quarter.

 

First-half net profit was 705.44 million baht (0.86 baht a share), down 29% from 993.55 million (1.20 baht a share) a year earlier.

 

Second-quarter sales revenue dropped 18% year-on-year to 3.22 billion baht. But sales were up 22% from the first quarter, with IC sales up 46% while microelectronics rose 16%, Hana said in a filing to the Stock Exchange of Thailand.

 

"The first half of 2009 was much better than was expected at the beginning of the year, thanks to customer inventory replenishment and partial economic recovery," said Mr Weir. "The large extent of demand recovery can be seen in second-quarter results. [but] continuing strength of customer demand remains a challenge for the rest of the year."

 

Analysts were upbeat about Hana's results.

 

"Hana's stellar earnings of 504 million baht in the second quarter, an increase of 151% from the first quarter, beat our expectation by 36.3% and the consensus by 34.3%," KGI Securities (Thailand) said in a report. "A higher-than-expected gross margin was the reason for the surprise."

 

Sales also showed a significant recovery from rock bottom in the first quarter. The company's balance sheet was solid, being debt-free and with cash-on-hand of about 3.7 billion baht, KGI said.

 

Shares of Hana closed on Friday on the SET at 18.50 baht, up 40 satang, in trade worth 6.8 million baht.

 

 

[Pom Michael]

Great - but still has a ways to go to get back to THB 28 per share. Although Hana stocks do give good dividends.