Anticipated Increase in NT Dollar Likely to Impact Revenue for Advantech
Rewritten Article:
Updated by MJ, Informal Tech Reporter
Advantech Co's profits could take a hit due to rising New Taiwan dollar (NTD) values, according to K.C. Liu, the chairman of the company. This ain't no walk in the park, folks, as it'd clobber their revenue and EPS if the situation persists.
At a recent presser in Taoyuan, Liu spilled the beans, stating, "Our revenue might take a bit of a dip, and with the NTD being our currency of choice for financial reports, you can bet your bottom dollar our EPS and share price could slip too."
So, what gives? Well, Advantech's usual game is to deal in US dollars overseas, but they log their earnings in NTD. An NTD boost of around 3-5% will shave off profits, Liu says. But it ain't all bad news—they plan to recoup what they lose in other sectors.
Yesterday, the NTD hit an impressive NT$30.145 against the US dollar, surging 2.96%. Over the past two sessions, it's up 5.85%, which, if left unchecked, would spell serious foreign exchange losses, but Liu seems optimistic they can muddle through.
Now, the big question on everyone's mind: what about those US tariffs? Liu reckons the company will split the bill with their clients and soak up a portion—the actual rate might not even touch 32%, he says. And hey, let's not forget, Taiwanese-made industrial computers are mighty tough to replace, so this tariff drama'll eventually pass.
With a slideshow of potential revenue drops, Advantech plans to double down on AI and software systems to bring higher value to their clients. To future-proof their business, they're already constructing factories in southern California, reserving half the site for expansion. They've been assembling large system products in northern California for 20 years, Liu noted.
Some of Advantech's board members have proposed building surface mount technology (SMT) plants in the US to sidestep hefty import tariffs. However, like any solid plan, cost, labor, and flexibility need careful consideration. SMT production is complex, low-volume, and diverse, so sending experienced supervisors abroad would just add to the expenses, Liu warned.
Looking ahead, as demand for edge AI computing and artificial intelligence of things skyrockets, Advantech aims to stake its claim in the smart factories, energy, retail, and hospitality sectors. They'll be demoing edge AI applications at the Computex Taipei trade show from May 20 to 23, featuring some autonomous robots, robotic arms, and service robots, developed with partners.
- Advantech Co's profits may decrease due to rising New Taiwan dollar (NTD) values, as stated by K.C. Liu, the company's chairman.
- Advantech typically operates in US dollars overseas but reports earnings in NTD, so a significant increase in the NTD could impact their EPS and share price, as Liu mentioned.
- To mitigate potential losses, Advantech is planning to focus more on AI and software systems to offer higher value to their clients.
- According to Liu, some of Advantech's board members have suggested building surface mount technology (SMT) plants in the US to avoid high import tariffs, but the final decision may depend on the cost, labor, and flexibility considerations.
