To address evolving market and customer demands, Joinsoon Electronics Manufacturing Co Ltd is expediting its capacity transfer. The phase-two expansion at its Thailand facility has been completed and is set to begin production in the third quarter of 2024.
With this new plant, the production ratio between mainland China and Thailand will shift from the previous 80:20 to 60:40 by 2024. As the transfer of capacity continues, the company expects the production ratio to equalize to 50:50 by 2025.
Kevin Ou, CFO of Joinsoon Electronics, stated that the company is currently experiencing transitional challenges due to the shift of production capacity from China to Thailand, as well as adjustments in its product portfolio. Consequently, the gross margin for the first half of 2024 has decreased to 15.19%.
In the second quarter of 2024, the company reported a loss per share of NT$0.21 (US$0.07), resulting in a cumulative loss per share of NT$0.40 for the first half of 2024. This marks a substantial widening from the loss per share of NT$0.06 year-over-year.
Joinsoon Electronics has detailed that phase two of its Thailand facility will produce medical wiring harnesses, molds, silicone injection molding, and high-speed wiring harnesses. As the new plant continues to adjust and optimize its learning curve throughout the first half of this year, the company expects improved gross margins in the second half.
Furthermore, all product certifications for the Thailand facility have been finalized, ensuring the plant is well-positioned to handle future demand, which bodes well for its future development potential. The company also aims to bolster its market presence by expanding its offerings in AI medical robotic arms, multi-function products (MFPs), military antennas, health monitoring systems, AI servers, and smart recognition technologies.
Joinsoon Electronics reported that its current order visibility extends approximately three months, with a utilization rate exceeding 90%. The company can address urgent orders through overtime if necessary.
The phase-two facility currently utilizes approximately 60% of its available space, which is projected to accommodate capacity requirements for the next two to three years. With expected enhancements in operational efficiency at the Thailand plant, the company anticipates revenue in 2025 will exceed that of 2024.
For the first half of 2024, Joinsoon Electronics posted revenues of NT$1.364 billion. The revenue breakdown includes 54% from wiring devices and antennas, 24% from high-frequency products, 8% from electronic products, and 14% from materials and other segments. The company achieved a consolidated gross margin of 15.5%. However, it reported an operating net loss of NT$67.29 million and a net loss after tax of NT$44.21 million, translating to a loss per share of NT$0.40.
