Wah Lee Industrial Corp. (3010.TT) announced its cumulative 3Q2020 financial results today. Its cumulative 3Q20 sales reached NT$43.35 billion, a 6.6% YoY growth. Cumulative 3Q20 gross profit was NT$3.488 billion, a growth of 10.6% compared to the same period of last year. Operating profit came to NT$1.607 billion, YoY growth of 32.1%. After tax profit reached NT$1.42 billion which is a strong growth of 28.2% YoY and generated a brilliant record of NT$6.14 EPS.
Single quarter Q3 2020 sales was NT$16.16 billion, which is a record high and a growth of 11% YoY. 3Q20 gross profit was NT$1.287 billion, a growth of 11.5% YoY. 3Q20 operating profit margin reached 3.94%, which is the highest single quarter operating margin in the past 10 years. 3Q20 after tax profit was NT$636 million, a growth of 41.7% YoY. 3Q20 EPS surpassed the threshold of NT$2 per share and reached NT$2.75, which is a record high since the public listing of the company for the past 20 years.
It was a little bumpy in the operations in the beginning of this year in January and February due to the pandemic. But later on because of the appropriate public healthcare measures in Taiwan and the shifts of orders to Taiwan, the company’s sales started to take off, driven by the demands from work/study-from-home economies and the launches of global 5G networks. Wah Lee’s gross profit and operating profit also went higher. Its advanced semiconductor materials, including photoresist, CMP slurry, specialty gases, and electronic-grade chemicals, were catered to the strong demands of foundry and DRAM customers, semiconductor sales was growing at double digits. High speed, low delay, and big data transmission 5G era has arrived and the AI functional next generation servers also become the mainstream device, Wah Lee’s 5G related PCB materials and substrates have driven the sales even higher. One example is the dry film needed for the high resolution PCB manufacturing processes.
The pandemic created the business opportunities for on-line working and studying, market demands for PC, NB, servers, and video conference cameras increased significantly and demands for Wah Lee’s high end engineering plastics also grew strongly. Looking forward, the increasing adoption of USB type C is leading the changes of charging lines. This will bring incremental demands for Wah Lee’s high temperature tolerance nylon materials. The game consoles are also making big sales these days, Wah Lee’s thermoset plastics fit the attributes of high material reliance and insulation and have become the first options for the power supplies of game consoles. High temperature enduring LCP (Liquid Crystal Polymer) has been successfully adopted by consumer electronics and automobile electric appliances. In the future, it will also be used for the high frequency connectors for 5G servers.
In recent years, more and more technology conglomerates have come to Taiwan to set up their data centers and cloud stations. Their focus is on the green energy resources that Taiwan owns. Wah Lee echoes the carbon reduction trend in the global community, it has deployed its business aims in the solar power stations and energy storage systems. Wah Lee has been one of the founding shareholders of Tien Li Offshore Wind Technology Co., which was recently listed on the emerging-market board. Wah Lee will provide composite materials for the wind blades that Tien Li will make. Wah Lee has been playing a critical role in the promotion of green energy and low carbon emission efforts by the government and industry alike.