Synnex(2347TW) is expected to leap forward this year


  In 2020, Synnex International, driven by its full sprint in the fourth quarter and breaking through the 100 billion, will reverse its annual revenue and return to growth. Last year’s consolidated revenue was NT$334.3billion, ruling out the impact of Forex rate impact, it would have grown by 1% from 2019. In the first quarter of last year, due to the sudden impact of the epidemic, Synnex’s revenue fell sharply by 16%, a 10-year low; but the second quarter immediately stabilized, and the third and fourth quarters have returned to the track of positive year-to-year growth. And achieved double-digit quarterly growth for three consecutive quarters.


  Synnex said that last year, Australia and New Zealand performed best in all regions, not only setting a record high for the same period for five consecutive quarters, but also breaking the 60 billion mark throughout the year, setting a new record. Synnex Australia and New Zealand has accelerated the establishment of a complete upstream and downstream information connection in recent years. It has accurately grasped the supply chain service needs, and has established a close cooperative relationship with brands and national chain channels. Therefore, it can start advanced deployment at the beginning of the epidemic to fully grasp WFH/SFH business opportunity and stay-at-home economy.


  In the first quarter of 2020, Synnex China and the IC component businesses experienced a sharp decline of 20-30% due to the stagnation of economic activities and supply chain disruption caused by the epidemic. However, after the lockdown lifted in the second quarter and the re-operation of the supply chain, it immediately accelerated to catch up. Synnex China focuses on commercial business, data center storage devices and e-sports/gaming markets; the IC component business is also due to the successful in new brands, strong demand of end market, as well as active inventory by manufacturers, both of which have reached double-digit quarterly growth for three consecutive quarters, resulting in a slight decline of 4% and 2% respectively for full year.


  For Synnex Taiwan, IT related and consumer electronics products performed well, with year-to-year growth in each quarter of last year; while telecom saw a decline due to the wait-and-see attitude before the launch of 5G mobile phones. Indonesia was affected by severe shortage of main products and suspension of the Government procurement in the second half-year; Hong Kong was suffered by overall political and economic instability, and both had a decline of about 10%.


  In terms of new business development, Synnex’s active development of e-sports, technical services, cloud service and IoT in recent years have reached new milestones in 2020. Cloud service revenue has been striding forward by more than 50% for three consecutive years, and has grown by nearly 30% in 2020. At the same time, the number of subscribers has exceeded 500,000, which is double from the previous year. IoT revenue reached the 1 billion mark, five times from 2019. Technical service revenue is around NT$1.8 billion, an annual growth of 44%. In the e-sports sector, Synnex has led the market in brand deployment and channel expansion, and established the Synnex e-sports alliance to strengthen upstream, midstream and downstream connections. Last year, its revenue exceeded NT$20 billion, an annual increase of 54%, accounting for 6% of group revenue.


  Looking forward to 2021, Synnex has set the main axis of this year as "Leap Forward", and will sprint all employees to challenge new heights. In the distribution business, Synnex is optimistic about the market momentum this year, including the continuation of remote and stay-at-home economy business opportunities driven by the epidemic, the gradual recovery of the commercial market, continued demand for cloud services/data centers, and more mature 5G/AIoT applications, which will all drive related product to grow substantially.


  In the IC component business, Synnex has actively developed and operated Chinese IC brands in mainland China in recent years. It also penetrate and development solutions for Chromebooks, car panels, 5G/WiFi6 and others. It is expected to show results in 2021 and have the opportunity to return to the 100 billion mark this year. With the two major undertakings sprinting at full speed and the market is optimistic, Synnex’s 2021 performance can be highly expected.