Dear shareholders,
Ladies and Gentlemen,
一、 2021 Business Results
(一) Implementation and Results of the 2021 Business Plan
| Unit: NT$ thousand | |||
|
Item |
2020 |
2021 |
YoY (%) |
|
Operating |
25,421,687 |
32,524,688 |
27.94 |
|
Gross Profit |
4,950,614 |
5,979,549 |
20.78 |
|
Operating Income |
3,218,206 |
3,819,496 |
18.68 |
|
Non-operating Income (or Expenses) |
176,315 |
(4,793) |
(102.72) |
|
Net income after tax |
2,665,565 |
3,144,803 |
17.98 |
|
Net Profit Margin (%) |
10.49% |
9.67% |
－ |
(二) Budget Execution Status
The Company did not make public its forecast for 2021, so there is no need to disclose the budget execution status. However, the overall actual operating conditions and performance are generally in line with the Company’s internal operating plan.
(三) Analysis of Financial Income and Expenditure and Profitability
|
Item |
2020 |
2021 |
|
| Financial
Structure |
Debt ratio (%) |
47.85 |
41.18 |
| Long-term Capital to Property, Plant and Equipment Ratio (%) |
320.50 |
322.38 |
|
|
Debt-paying |
Current Ratio (%) |
186.44 |
170.88 |
|
Ability |
Quick Ratio (%) |
153.14 |
134.00 |
|
Operating |
Average Collection Days |
154.00 |
136.00 |
| Average Inventory Turnover Days |
53.00 |
62.00 |
|
|
Profitability Ability |
Return on Assets (ROA) (%) |
11.09 |
10.37 |
| Return on Equity (%) |
23.89 |
18.12 |
|
| Net Profit Before Tax to Paid-in Capital Ratio (%) |
101.95 |
99.61 |
|
| Net Profit Margin (%) |
10.49 |
9.67 |
|
| Earnings Per Share After Tax (NT$) |
8.19 |
9.00 |
|
(四) Research and Development Status
ITEQ Corporation has been cultivating enthusiastically on high-frequency, high-speed, and low transmission loss products for internet communication infrastructure applications, and is one of the world’s leaders in special laminate materials. The Company will continue to optimize and improve the existing low Dk/Df electronic materials for use in various fields, such as data centers, 5G communications, Internet of Things, new energy vehicle electronics, etc.
The development of high-speed, high-performance, and compact technologies for various communication products has boosted demands for different thin and build-up layer materials. In 2021, ITEQ Corporation successfully developed special laminate materials such as prepreg (PP) film and resin coated copper (RCC) with low Dk, low coefficient of thermal expansion, and high dimensional stability, which are suitable for advanced high-end packaging processes due to its high quality and reliability.
ITEQ Corporation continues to advance its core technologies and R&D capabilities in order to develop various high-end and key laminate materials for use in different fields, such as deep learning in artificial intelligence (AI), military/aerospace, 5G IoT, high-end semiconductor packaging processes, autonomous driving, and electric vehicles, working toward becoming a one-stop supplier of electronic materials. While developing new processes and new technologies, we also implement green factor practices to fulfill our corporate social responsibility.
二、Summary of 2021 Business Plan
(一) Business Policy
1. Focusing on our existing business of “High-end Electronic Materials” and extending the integration of high-density interconnection and carrier board technologies: The Corporation will strive to become a leading manufacturer of lead-free, halogen-free and other environmentally friendly materials, high-speed, high-frequency and low-loss materials, as well as high-density interconnection boards and carrier board materials, the product applications of which include 5G infrastructure, network communications, data center, automotive electronics, smartphones, consumer electronics and other related products, and continue to increase its market share in the high-end copper foil laminate market.
2. Quality as the basis for sustainable business development: The Corporation will strengthen and improve its quality control system of the supply chain, including raw material supplier management, constant improvement of in-plant process control, and quality and reliability monitoring of output, in order to comply with customers’ incoming material regulations and standards, establish a comprehensive production and quality assurance system and capability, reduce quality complaints and cost of sales, improve product yield rate and management efficiency, strengthen the company’s quality and increase profitability.
3. With the accelerated expansion of the global data sector and the rapid growth of IP traffic, the demand for 5G communications and the Internet will continue to drive the demand for high-speed transmission and high-density interconnect products, and the rising demand for carrier boards and various end-use applications, the Corporation continues to invest in the development of high-speed and high-frequency materials, high-density interconnect boards, RF/microwave and carrier board materials for semiconductor applications, along with the expansion of production capacity to meet the huge demand for electronic materials through economies of scale.
(二) Important Production and Sales Policy
1. Enhance overall structure analysis of each key product market, to comprehend the changing trend of end markets, seize the market opportunities and adjust the corresponding strategy.
2. Targeting at niche market, continue to develop halogen-free materials, increase the overall market share of halogen-free materials and develop eco-friendly materials with excellent characteristics at a competitive price and promote application usage in various areas in the market.
3. Continue to strengthen the promotion of 5G infrastructure and networking related high-end products to obtain end-customers’ certifications and put into mass production orders.
4. The new production capacity will actively expand and increase the market share of high-density interconnect materials and promote the newly developed high-density interconnect materials to meet the demand of next generation products.
5. The Corporation is committed to meeting customers’ needs for low-loss and high-density interconnection materials for advanced driver assistance systems (ADAS) and high-voltage and heat-resistant materials for electric vehicle charging, as well as accelerating the certification of material-compatible products to meet the new demand for future automotive electronics.
三、Future Development Strategies of the Company
(一) Continuously focus on the development of 5G Infrastructure and networking equipment, such as high-speed/high-frequency, low dielectric constant halogen-free material, and aggressively expand the development of eco-friendly products applied for 5G infrastructure, data center and cloud equipment.
(二) Promote and expand the share of high-density interconnect materials to enter the new generation of high-density interconnect applications with high specifications.
(三) Expedite the completion of certification of ultra-low loss and high frequency laminate materials with respect to 5G mmWave and base station equipment applications product.
(四) Actively promote niche products such as high-frequency material and digital material i.e., RF antenna in base station, car radar and autonomous car related products.
四、
Impact of External Competition, Legal Environment and Overall Business Environment
In February 2022, Russia launched military action against Ukraine, and the United States, Britain and other Western countries imposed economic sanctions on Russia. The Russia-Ukraine conflict is like a black swan, raiding the global market such as precious metals, energy and industrial supply chain, deepening the global inflationary pressure and increasing macroeconomic uncertainty. On the other hand with regards to 5G network communications, cloud data centers, servers in response to the increasing terminal demand driven from 5G Enhanced Mobile Broadband (eMBB), Massive Machine Type Communication (mMTC) and Ultra Reliable and Low Latency Communication (URLLC) to enable higher speed transmission, massive equipment cascading and low latency transmission coupled with automotive electronics upcycle, the penetration of high-frequency/-speed materials will continue on the rise. ITEQ will continue to benefit from its comprehensive and diversified product roadmap and excellent product quality.
Looking ahead to the future, the global economy is expected to recover as COVID-19 vaccination becomes more widespread and as the worldwide pandemic abates.Global data traffic has increased significantly, driving network operators and telecommunication service providers to upgrade their equipment to meet the needs of low latency, high reliability, and high-speed computing applications as well as stimulating a surge in the demand for high-speed and ultra low-loss high-end materials. While benefiting from these opportunities, the Company will also make the best use of its leading position to accelerate its operational development and planning.
In the wake of the increasingly intensified market competition and the ever-changing industrial structure, the Company will keep on devoting in R&D technologies advancement and patent expansion, innovation, and active talent retention in order to strengthen the market competitiveness. ITEQ Corp. appreciates each of your support, and will put all the effort to bring the most shareholders’ value to you
Best regards and wish you all safe and sound.
Chin-Tsai Chen Chairman of the Board
May 3, 2022