Synnex's (2347TW) Q3 profit NT$2.1 billion, YTM NT$5.7 billion both hit 9-year high again

  Synnex announced its financial earnings for the third quarter and the accumulated three quarters of 2020. The main operating indicators, including gross profit, operating income and net income, all hit a 9-year high simultaneously. Especially, for the third quarter, operating income was NT$1.9 billion, increased 43% YoY; net income was NT$2.1 billion, increased 29% YoY; earnings per share was NT$1.26. Accumulatively, for the first three quarters, operating income was NT$5.2 billion with 32% growth; net income was NT$5.7 billion with 17% growth; earnings per share was NT$3.41.


  Despite the global epidemic has not been alleviated, market conditions gradually better off over the quarters. Synnex's consolidated revenue in the third quarter increased by 2% YoY and 18% QoQ, reaching double-digit QoQ growth for two consecutive quarters. At the same time, the operating indicators such as gross profit, operating income, and net income also grew substantially. In terms of gross profit, benefited from the continuous optimization of the product mix, gross profit margin reached 4.3%. Thanks to the result of Agility Project, operating expenses extensively reduced by NT$400 million or 17% YoY, has posed operating income to NT$1.9 billion, with a sharp increase of 43%, and set a record high for the same period for four consecutive seasons. Profit before tax was NT$2.9 billion, increased 26% QoQ and 47% YoY; net income after tax was NT$2.1 billion, the highest record since 2011, with 18% growth QoQ and 29% YoY; earnings per share was NT$1.26.


  In the first three quarters, Synnex's consolidated revenue fell by 5%. In the exception of the impact from Forex rate, the revenue was only down by 2% instead. Gross profit margin reached to 4.6%, increased from 4.3% last year. Operating expenses down by 15% or NT$1.0 billion, and operating income increased by 32% to NT$5.2 billion. Profit before tax was NT$7.4 billion, up 21%; net income after tax was NT$5.7 billion, up 17%, and earnings per share was NT$3.41. Synnex's profitability has continued to ascend regardless of the amount or ratio, the main operating indicators of gross profit, operating income, and net income have reached a 9-year high in the third quarter and the first three quarters.


  In the third quarter, the epidemic has prompted opportunities in remote and zero-touch business models. At the same time, it is also accelerating the enterprises to embrace the digital transformation sooner and driving the market demand of information and communication products which have already strong hold. In addition, Xbox/PS5 and nVidia's new generation of gaming graphics cards to be launched in the fourth quarter; iPhone/5G mobile phones are also being released and laptops/tablets are also introducing new products, which will drive demand for replacement. Synnex convinced that the fourth quarter will outperform the third quarter.