Dufu Tech 2QFY18 profit up 72%, share price gains 65% in a month

-A +A

KUALA LUMPUR (Aug 7): Dufu Technology Corp Bhd saw its second quarter ended June 30, 2018 (2QFY18) net profit rise by 72% to RM11.81 million, from RM6.88 million a year ago, due to higher demand for Hard Disk Drives (HDD) components and favourable foreign exchange effect thanks to the strengthening of the US dollar.

The group’s earnings per share rose to 7.2 sen from 4.1 sen previously. Dufu’s board of directors also approved a single-tier interim dividend of 2.5 sen per share for FY18.

The company’s share price has gained 65% from 98 sen on July 16 this year, which was three weeks ahead of its quarterly result announcement today.

Today alone, the counter gained 17 sen or 11.72% to close at RM1.62, giving it a market capitalisation of RM265.26 million.

In its filing with Bursa Malaysia today, Dufu disclosed that quarterly revenue for 2QFY18 grew by 43% to RM58.69 million, from RM40.97 million last year.

For the first half of FY18 (1HFY18), Dufu’s net profit went up by 33% to RM17.57 million from RM13.19 million in the previous corresponding period, on the back of revenue of RM111.45 million, which was an increase of 28% from RM87.36 million in 1HFY17.

Moving forward, Dufu said it expects sales to continue to remain favourable towards the second half of 2018 as its major products are driven by the growth in high-capacity nearline HDDs as well as stabilisation of client storage demand.

“The long-term future of HDDs will likely rest with high capacity HDDs, particularly in data centres serving cloud storage applications. The demand for high capacity storage drives, enhanced performance, and lower storage cost is set to rise,” it said.

“Global internet penetration, the rise in e-commerce in emerging markets, and the current trend for high-resolution media standards are the likely drivers for the continuing rise in global data storage demand,” it added.

Nevertheless, Dufu said it will continue to improve its operational efficiency and keep a tight rein on costs to ensure price competitiveness on its products.

The group said it is also working closely with existing and new customers in creating value to their supply chain and will continue to seek opportunity to venture into new business segments that can synergize with its current business model.

“The incorporation of Dufu Metal Sdn Bhd in this quarter is a testament of our effort to synergise our current machine precision and metal fabrication business which will eventually value add to the group’s exposure in the business segment of fabrication and assembly of machinery equipment,” it said.

“With this in place and considering the continuing stable demand based on the current market trend and assuming that there is no volatility in the US dollar currency against ringgit, the group is optimistic in its earnings and growth in the coming quarters,” it added.