Anticipated Annual Revenue Growth for CipherLab ranges from 5% to 10% as declared.
In the face of a challenging second quarter, CipherLab Co., a leading supplier of handheld industrial computers, barcode scanners, RFID readers, and related software, is projecting a revenue growth of 5-10% for the current year. This optimistic outlook comes despite the impact of the sharp appreciation of the New Taiwan dollar against the US dollar, which has resulted in significant foreign-exchange losses[1].
The currency fluctuation has affected CipherLab's second-quarter operations, offsetting a portion of their revenue. This economic challenge is typical for companies with significant international transactions, as currency appreciation can make exports more expensive and less competitive in foreign markets[1]. However, the company expects revenue in the second half of the year to rise by 20% compared to the first half, driven by large orders secured in Taiwan, Japan, and Southeast Asia[1].
CipherLab's clients range from system integrators, express logistics operators and shipping companies to automakers, hospitals, and convenience store chains. The company has recently raised prices for products shipped to the US, assuming tariff rates would be 10-20%. If the tariff rate exceeds 20%, CipherLab might consider further adjustments[1].
Taiwan remains CipherLab's main production base, with the US market accounting for about 20% of its revenue. Western Europe contributes 5%, and eastern Europe, including Russia, makes up 20% of CipherLab's revenue. The Japanese market is expected to account for 10% of CipherLab's revenue next year, up from 5% currently[1].
The growth momentum is expected to last until next year for CipherLab. This optimism is supported by the robust growth projected for the markets they operate in. The RFID reader market is projected to grow at a Compound Annual Growth Rate (CAGR) of 14.7%, while the Automatic Identification and Data Capture (AIDC) market is anticipated to grow at a CAGR of 9.6% from 2025 to 2031[2][3].
In a strategic move, CipherLab plans to establish a Japanese subsidiary next month, further strengthening its presence in the growing Japanese market. Despite the challenges faced in the second quarter, CipherLab Co. expects to report losses per share of NT$0.14 in the first quarter, and revenue of NT$270.65 million (US$9.39 million) in the first quarter, which decreased 5.74% annually[1]. The company anticipates a stable performance in eastern Europe.
[1] Taiwan News, 2023 [2] Market Research Report, 2023 [3] Industry Analysis Report, 2023
In the context of the economic challenges faced by CipherLab, the company has taken measures to offset losses, such as raising prices for products shipped to the US, which fall under the finance category. The company's optimistic projection of a 20% increase in revenue during the second half of the year is supported by large orders in various industries, including Taiwan, Japan, and Southeast Asia, highlighting the cross-industry applications of their products.
