Wah Lee Industrial Corp. (3010.TT) announced August 2020 unaudited consolidated sales of NT$5,109M, a growth of 4.6% from last year. The cumulative Jan.-Aug. consolidated sales reached NT$37,515M, a growth of 5.1% from the same period last year and setting record high again. The 2Q20 financial results were outstanding; sales and gross profit both reached quarterly new high, quarterly operating margin has risen for two consecutive quarters. The 1H20 operating margin has grown 29.1% YoY. The core business profitability performed well.
Wah Lee is like the “aircraft carrier” in the raw material industry. Wah Lee’s major semiconductor customer has been growing in its high end nodes due to 5G, AI, HPC driving the demands. Its order visibility is reaching out for next year. This has driven the sales of Wah Lee’s photoresist, CMP slurry, electronic grade chemicals, and specialty gases. The related sales has been growing in double digits. PCB high frequency materials has benefited from high end servers and shifts of orders to Taiwan. High end engineering plastics penetrated into high frequency connectors. It was estimated that Wah Lee’s sales will continue to grow and perform well for the whole year.
Many countries around the world are pushing hard on the alternative energies as the global carbon-reduction trend prevails. Taiwanese government announced the vision of non-nuclear home by year 2025. Taiwan owns many unique green energies in its natural environment, such as solar power in mid to southern parts of the island, and 16 best sites for wind power out of the world’s 20 offshore best wind power sites. With the government’s policy supports, major Taiwanese enterprises are actually buying green power. TSMC has made a commitment to use 100% renewable energies before year 2050. Its leadership in this endeavor has prompted 15 other Taiwanese major enterprises to follow suit.
Wah Lee has been well-prepared for offshore wind power and solar power stations, and has developed the ESS (Energy Storage System) business to provide stable and timely supply of green energy. The government has set the rules for green energy to take 20% of total power sources, within which solar power has the biggest share of 66%. Government set the goal of 20GW solar power by year 2025 and the related investment will reach NT$1.2 trillion. Wah Lee cooperates with a solar module maker and delivers its own brand name solar modules. The modules are leading the industry in terms of efficiency and highest watt generation. It was well accepted by customers in the first half of the year and will enlarge its supply in the second half. Wah Lee also sells inverters which are helpful in raising the power generation efficiency.
Wah Lee’s subsidiary Kingstone has cultivated in the solar power stations for many years. It not only has track records in roof top solar power but also is developing its large-scale surface solar power stations. The total capacity of Kingstone will reach 75 MW by the year end. This will also help drive the sales of Wah Lee’s solar module and inverter sales and EPC service revenues.
The MoEA has announced that major electricity consumption companies will have to use 10% of green energy within 5 years starting from January 2021. Wah Lee has teamed up with the largest maker of wind power blades, Tien Li Offshore Wind Technology, and signed a raw material supply agreement in May this year. Wah Lee will provide related materials that are needed to build wind power blades. In the future, the team will not only provide domestic demand but will also provide for the Asian wind power market. Under the guidance of the government and the corporate social responsibility, the development of green energy is inevitable. Wah Lee will work together with the government and the industry to become the critical driver of low carbon green energy sources.