Dufu Tech 2Q earnings jump on HDD demand

by S BIRRUNTHA / pic by TMR FILE

DUFU Technology Corp Bhd’s net profit jumped 60.86% to RM15.92 million for its second quarter ended June 30, 2021 (2Q21), from RM9.9 million a year ago, supported by a strong demand for its hard disk drives (HDD) components.

Its 2Q21 revenue rose 20.18% year-on-year to RM88.22 million from RM73.41 million previously, mainly due to an increase in volume loading by customers related to HDD components, according to the group’s filing to Bursa Malaysia yesterday.

The precision machining parts and components manufacturer also attributed the strong double-digit growth to the enormous demand for sheet metal welded assembly components and parts, and the buoyant orders coming from control and sensors in the non-HDD segment.

The group also noted that its manufacturing plants in Malaysia operated at a much-reduced level of workforce under the Movement Control Order (MCO) in the preceding year’s corresponding quarter.

Nevertheless, the group registered a loss per share of 3.1 sen for the quarter compared to a loss per share of 3.9 sen previously.

For the first six months, the group’s net profit jumped 47.4% to RM35.44 million from RM24.04 million in the same period last year.

Its January to June revenue was up 23% to RM167.72 million from RM136.36 million.

Dufu Technology has declared an interim dividend of two sen per share for the financial year ending Dec 31, 2021 (FY21), payable on Sept 24.

The company is seeing healthy order flow from existing customers, coupled with confirmed orders from new customers.

It added that the demand from HDD business remains robust with cloud demand fuelling 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.

“All-in-all, we are seeing strong visibility of orders for the second half of 2021 which should contribute positively towards the group’s earnings,” it said in a statement.

Nevertheless, Dufu Technology cautioned that the multiple implementations and various phases of MCO in Malaysia have significantly impacted businesses and reduced operation capacity.

On July 10-11, the group said a total of 737 employees were vaccinated as part of the Public-Private Partnership Immunisation Programme initiated by the Ministry of International Trade and Industry.

Dufu Technology said it continues to streamline its business structure, improve on its processes and optimise its operations.

“Buoyed by the abovementioned positive developments for the group vis-a-vis the associated risks on the unpredictability and uncertainty posed by Covid-19 pandemic on the group’s business operations and supply chain disruption, we are cautiously optimistic of the group’s financial performance in the coming third quarter of 2021,” it added.

Dufu Technology shares closed 1.11% lower, or five sen, to RM4.46, valuing the group at RM2.41 billion.