Synnex revenue continues to reach record high in Q2 , PAT NT$2.38 billion and EPS NT$1.43 are second highest

Synnex (2347) Q2 revenue was NT$103.4 billion, a new high of the corresponding period, YoY increase 7% with surpassing NT$100 billion for the fourth consecutive quarter. After-tax net profit NT$2.38 billion and earnings per share NT$1.43 are the second highest in the same period. In the first half, the revenue was NT$204.2 billion, first time across NT$200 billion milestone in first half, YoY increase 11%. After-tax net profit was NT$4.92 billion, earnings per share was NT$2.95.


The overall economic activity slowed down significantly in Q2, and continual bouts of market noises did have an impact on business operations. In terms of revenue performance, Synnex continues to maintain upward trend by promoting Management Service Platform (MSP) and expanding market share. But operating expense has increased due to the impact of lockdowns, inflation and lift rates, resulting in profitability lower than expectation.


Synnex Q2 revenue was NT$103.4 billion, hitting new high for three consecutive quarters. Especially Commercial Value-added Business grew by 18% and reach record high for six consecutive quarters. Including data center products, networking, security, cloud services and AIoT are all increased by more than 20% YoY. IC Component Business benefited from factories accelerating production after unlock, as well as the successful of developing new customers, it hit historical high in Q2 with YoY increase 10%.


In terms of profitability, Synnex's operating expenses increased by 6% in Q2, while operating income fell by 3% with operating income rate 1.92%. The before-tax net profit was NT$3.03 billion, decrease 21% YoY. Mainly because last year included a one-off profit on investment disposal of NT$730 million and an investment income of NT$190 million from Synnex US under the equity method. If excluding above factors, before-tax net profit this Q2 would be increased by 4%. The after-tax net profit was NT$2.38 billion and earnings per share was NT$1.43, both down 29% compare to last Q2.


For Q3 outlook, Synnex is optimistic about the performance of revenue because of the traditional peak season effect, coupled with new product launch, continued ease of shortages, and the mass promotion activities by various brands. In terms of profitability, Synnex will generate a nonrecurring profit around NT$6.7 billion or NT$4 per share in Q3 due to the change in the accounting method according to the International Financial Reporting Standards (IFRS).