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Wah Lee Industrial Corp. (3010.TT) announced its FY2022 consolidated sales of NT$73.570 billion which is a YoY growth of 4.3%. FY2022 gross profit was NT$5.567 billion and operating profit was NT$2.643 billion. With steady profit contributions from long-term equity method investment companies, non-operating profit was NT$892 million. Therefore, pretax profit totaled as NT$3.536 billion. FY2022 net profit after tax and minority was NT$2.485 billion, which translated into EPS of NT$10.53 per share.
Wah Lee’s board also approved a cash dividend of NT$6.1 per share, which is the second highest cash dividend number since its IPO 23 years ago. This cash dividend payment will be equivalent to a yield of about 7% as of today’s share price. Over the past ten years, Wah Lee has been able to maintain a high level of cash dividend yields, which is far higher than the average yield of 3.97% from the overall Taiwan stock market over the same period of time. Wah Lee has been well diversified among different industries and is less affected by single industry up and down cycle. The company has also invested in ASEAN countries long time ago and has been cultivating in the US and EU countries and therefore is more resilient in operations and can avoid the risks associated with geo-political instabilities.
The current industry statistics and professional experts have predicted the proximity of the end to the inventory adjustments in 3C industry. The common view is that the bottom is somewhere around 2Q this year. The 2nd half economy will be gradually recovering. Wah Lee has been targeting on the developments of EV, solar power build-ups, ad AI. Take EV for example, global EV markets have been competing on prices and most countries have set up the deadlines for internal combustion engine vehicles and these will push up the penetrations of EVs worldwide. Wah Lee’s high-end engineering plastics have already supplied to EV’s ECU connectors, navigation device, car camera modules, charging poles, and high voltage spare parts, etc..
Wah Lee’s roof-top and surface solar power stations have reached a total capacity of 54 MW and will strive to open up more fields in Taiwan and reach a target of 100MW by the end of this year. The company will be able to provide our high-tech customers with RECs (Renewable Energy Certificates) and carbon rights. Wah Lee has also cooperated with international funds and insurance companies to build up more alternative energy solutions.
ChatGPT has been a recent hype and the AI behind the scene has become the topic of the year this year. AI will be dependent on a large part of HPC (high performance computing) and cloud computing. The HPC IC chips will be in great demands in the future. Semiconductor fabs that produce these chips will lead in the bounce back of industry cycle. Wah Lee has been the leading semiconductor raw material provider and will accompany the semi customers along the growth trajectory. Cloud computing will bring up the demands for high-end servers and switches. Wah Lee’s high frequency 5G CCLs (copper clad laminates) and dry films for high resolution DI (direct imaging) PCB manufacturing processes will also benefit on the upside and contribute more sales quarter by quarter.