Asustek, Acer shares boosted by 2020 results, dividend proposals

Taipei, Shares of Asustek Computer Inc. and Acer Inc., two of Taiwan's leading PC brands, got a significant boost Thursday after both firms reported impressive earnings for 2020 on the back of a booming global stay-at-home economy amid the COVID-19 pandemic, dealers said.

Buying in the two stocks was also sparked by their proposed cash dividends, which represented attractive dividend yields for investors, the dealers added.

Shares of Asustek soared 10 percent, the maximum daily increase, to close at NT$358.00 (US$$12.65), while shares of Acer gained 2.90 percent to end at NT$28.40 on the Taiwan Stock Exchange, where the benchmark weighted index finished 0.44 percent at 16,287.84 points after a rally on the U.S. markets overnight.

Soon after the local equity market opened, Asustek shares hit the daily ceiling, jumping 10 percent, and Acer also moved sharply higher, and their strength continued as investors were encouraged by earnings for 2020 and high dividend yields, the dealers said.

In an investor conference held Wednesday, Asustek said it posted NT$26.56 billion in net profit in 2020, up 119 percent from a year earlier, with earnings per share (EPS) at a new high of NT$35.8, compared with NT$16.3 seen in 2019.

In 2020, Asustek's brand sales stood at NT$382.44 billion, up 15 percent from a year earlier with a gross margin, -- the difference between revenue and cost of goods sold -- at 17.2 percent, up from 13.4 percent a year earlier.

In the wake of the improving bottom line, Asustek proposed to issue NT$26 in cash dividend per share with a dividend payout ratio at about 73 percent. Based on its closing share price of NT$325.50 on Wednesday, the dividend yield reached a staggering 8 percent.

In the fourth quarter alone, Asustek said its net profit totaled NT$9.85 billion, up 273 percent from a year earlier, after the company raked in non-operating profit worth NT$3.07 billion, including NT$2.17 billion in foreign exchange gains. However, the fourth-quarter net income fell 6 percent from the third quarter.

Speaking at an investor conference, Asustek Chief Financial Officer Nick Wu (???) said the global PC market is expected to continue to grow this year, but he cautioned that an oversupply could be seen in the first half of the year. Wu added that his company will continue to work hard to boost sales.

In the first quarter, Asustek said its PC shipments are expected to grow 70 percent from a year earlier but to fall 10 percent from the fourth quarter, while its component shipments are expected to grow 50 percent from a year earlier but to fall 5-10 percent from a quarter earlier.

For its part, Acer reported NT$6.03 billion in net profit for 2020, up about 130 percent from a year earlier. Its EPS hit a 10-year high of NT$2.01.

In 2020, Acer's consolidated sales rose 18 percent from a year earlier to NT$277.11 billion, while its operating income rose 190 percent from a year earlier to NT$8.94 billion, the company said.

Acer has proposed to issue NT$1.5 in cash dividend per share, which represents a dividend payout ratio of 75 percent. Based on the company's closing share price of NT$27.6 Wednesday, its dividend yield stood at 5.43 percent.

The PC brand said it has scheduled the ex-dividend date for July 6, and will issue the dividends on Aug. 5, while an annual general meeting is scheduled for June 11 to discuss the dividend proposal.

Acer, meanwhile, said it is planning to list shares of its subsidiaries -- Weblink International Inc. and Acer E-Enabling Service Business Inc. -- on the local equity market this year.

Source: Focus Taiwan News Channel