Giant increase in production by 15%

Guo Ju (2327) announced its fourth-quarter financial report and held a law meeting yesterday. Guo Ju is expected to increase its production capacity by 10% to 15% this year. Regarding product price increase, Chen Taiming, chairman and general manager of the company, said that the current 1st quarter industry development. With cautious optimism, it is expected that a new wave of bargaining will be launched in the second quarter when the industry is relatively clear.

Chen Taiming stated that the labor rate of factory workers in the Chinese mainland reached 85% after the Lunar New Year, and that the growth momentum of smart phones, LED TVs, LED lighting, and set-top boxes had appeared in the first quarter. The first quarter revenue will be higher than that in 2010. In the fourth quarter, the growth rate was about 3% plus or minus 2% (the revenue growth rate was about 1 to 5%). “This year is a mild growth.”

For the issue of product price increase, Chen Taiming explained that in the first quarter, the MLCC (laminated ceramic capacitor) and chip resistance order shipment ratio (B/B value) was about 1, the supply and demand status was balanced, and the current capacity utilization rate was 90%. The demand for notebook computers and general mobile phones is weaker than expected. It is also necessary to observe the situation in the second quarter. “It is still too early to talk about prices. The price of products in the second quarter will remain flat or increase, and it is still difficult to answer.”

Guo Ju expects that this year's production capacity will grow by 10% to 15%, which is the same as the growth of the overall passive components industry. Chen Taiming pointed out that last year everyone had significant growth in production capacity, and Guo Guo was one of the more active manufacturers. After Intel solved the Silicon chip incident, overall demand should come up.

Regarding the legal person’s concern about the exchange rate, Chen Taiming stated that the appreciation of the NT in the first quarter affected the gross profit margin. If the NT$ appreciates 1 yuan, it will affect the gross profit by about 1.2%. The national giant’s internal estimate of the price of the new Taiwan dollar in the first quarter against the U.S. dollar is 29.2 yuan, this year's exchange rate, labor salary, raw material costs caused a huge cost pressure on the country.

The country’s fourth quarter consolidated revenue was 6.31 billion yuan, which was affected by traditional off-season, European and American climate issues and exchange rate fluctuations. The quarterly decrease was 16.1%, gross profit margin was 26.55%, quarterly decrease was 2.1%, operating profit was 915 million yuan, quarterly reduction was 36.4%. The pre-tax net profit was 888 million yuan, the quarter was 36.8%, the net profit after tax was 882 million yuan, and the post-tax profit per share was 0.36 yuan.

Guo Ju self-consolidated revenue of 27.315 billion yuan in 2010, an increase of 42.8%, gross profit margin of 28%, an increase of nearly 8 percentage points from the previous year's 20.2%, a pre-tax surplus of 4.625 billion yuan, an increase of 5.5 times, after-tax net profit 4.174 billion yuan, an annual increase of 5.15 times, after-tax earnings per share of 1.89 yuan.