KUALA LUMPUR (May 5): Dufu Technology Corp Bhd’s first quarter net profit grew 38% to RM19.52 million, from RM14.14 million a year earlier, as revenue rose on the back of an increase in volume loading by customers related to hard drives (HDD) components.

The higher earnings for the quarter ended March 31, 2021 (1QFY21) was also due to the continuing improvement in production efficiency, mainly due to economies of scale arising from the increase in production utilisation.

Earnings per share rose to 3.7 sen per share, from 2.8 sen a year ago, the group said in a filing with Bursa Malaysia.

Quarterly revenue was up 26.3% to RM79.5 million from RM62.95 million in 1QFY20.

“On top of this, the group also registered a strong double-digit growth following the enormous demand for sheet metal welded assembly components and parts and the buoyant orders coming from control and sensors in non-HDD segment,” said Dufu.

On a quarter-on-quarter basis, Dufu's net profit rose 30.9% from RM14.91 million in 4QFY20 while revenue slipped 7.2% from RM85.69 million.

The increase in net profit from the previous quarter was mainly due to the favorable foreign exchange rates pertaining to the strengthening of the US dollar against the ringgit towards 1QFY21, the group said.

On prospects, Dufu said the demand from the HDD business remains robust with cloud demand leading the charge to fuel the group’s growth.

“We are also positive on the group’s non-HDD segment as the semiconductor and tech hardware capital spending remains strong from domestic equipment exporters,” the group said.

All-in-all, Dufu said it is seeing strong visibility of orders for 2021 which should contribute positively towards the group’s earnings.

Dufu’s shares closed two sen or 0.46% lower at RM4.29 today, valuing the group at RM2.3 billion. Over the past year, the counter has gained 118% from RM1.97.