Letter to Shareholders

Dear Shareholders,

Whilst the materials cost increase gradually slowed down in 2019, the global trade tensions continued to accelerate. In the wake of the US-China trade disputes, the US government had trade frictions with Europe, Mexico and Japan. Among these, the trade war between the US and China has far-reaching and profound impacts on the global economy and supply chain. This has triggered extensive migration of manufacturing sites for Taiwanese manufacturers. In the case of the massive change first seen in the past thirty years, AcBel Polytech, Inc. remained calm and focused in its responses. Both annual revenues and profits increased as a result of growth in its consumer and industrial power supply products and the achievements of its green energy business. Below is our report to shareholders of our 2019 operating results and 2020 business prospects.

2019 Business Results

After four years of solid efforts, we successfully hit the NT$20 billion market again in annual revenues. Our 2019 sales totaled NT$20.584 billion, up 9.9% year-over-year. Post-tax earnings reached NT$1.485 billion, boosted with a gain from sale of land. Earnings per share was NT$2.87.

The benefit from the stabilization of raw materials costs during the year was more than offset by adverse effects of the trade war between the US and other countries. Nonetheless, AcBel Polytech managed to increase annual sales with commitment to quality and efforts to shorten lead-times and adjust cost structures, to counter the impact of market changes. Despite a disappointing year for 5G in 2019, our industrial power supplies performed well in the datacenter market by selling to telcos, corporates and targeting at applications such as IoT, edge computing, cloud computing, artificial intelligent, servers and network transmission. Meanwhile, our new businesses such as metering infrastructure for smart cities and solar power plant deployments also contributed to the growth momentum.

We have achieved some milestones in the green energy business. In 2019, AcBel Polytech was awarded by TaiPower its contract for 317,000 smart meters, accounting for 40% of the total volume in the tender. We are also demonstrating our technology and capability in smart grids. So far, we have signed contracts for the deployment of solar power plants over 100MW. We are also developing into a full-service platform by working with a leading electric motorcycle manufacturer in the power management system of charging stations. Last but not the least, AcBel Polytech’s efforts in corporate governance and corporate social responsibility are recognized, evidenced by the Asia Responsible Enterprise Awards (AREA) award in Investment in People and the 12th Taiwan Corporate Sustainability Award (TCSA) in Corporate Sustainability Reporting in 2019. 

Operation Environment and Development Strategies

“Providing total solution to be your leading edge green power partner” is AcBel’s commitment, aiming to create maximum value for customers, employees and shareholders. In combination of strong RD momentum, we step into the application of the areas of clean energy, solar power plant, medical equipment and electric vehicle related power products, with a view to become the innovative leading company of smart green energy in the power industry.

2020 Operating outlook

The year 2020 is expected to witness a continued growth in consumer power supplies, with the expansion of the end markets such as smart homes, e-sports, IoT and surveillance. The industrial power supply segment is forecasted to enjoy rapid growth by the increasing penetration of edge computing, cloud datacenters, artificial intelligence, Big Data and electric cars/motorcycles. Both the market size and orders are expected to increase. In addition, we are planning to expand capacity in Taiwan for fuel power supplies, as our international clients are growing their market shares. This should continue to gradually increase the topline for our power supply products. Meanwhile, we are also extending our footprint into the assembly and integration of power supply systems, in order to boost gross margins and sales.

The engineering of our new facilities in Tamsui commenced in January 2020 and the new capacity is expected to come online by the end of 2021 and ramp up in the first quarter of 2022. This smart factory is expected to contribute 2.5 billion in capacity, and boost sales and profits. The old site will be abolished and rebuilt after the new facilities come online. The renovated site is scheduled to ramp up in 2023.

Going forward, AcBel’s will focus on promising areas such as 5G and electric power for vehicles, aerospace, high-end consumer and medical equipment. We are committed to technology and development, and we are aiming high by bracing for challenges.

 

AcBel Polytech Inc.

  • Chairman: Hsu Sheng-Hsiung
  • President:Kao Ching-Shang
  • Chief Accountant:Yeh Jin-Mao