Given the worldwide spread of the COVID-19 Coronavirus, there have been reports in the press and from brokers concerning Phison Electronic’s (8299 TT) 2020 and 2021 earnings outlook. To provide greater transparency for our investors, we would like to clarify some key facts. In particular, a recent broker report that seems to extend a broad-brush treatment to the entire global memory device supply chain may lead to confusion amongst our investors regarding the fundamental outlook for Phison Electronics.

We would like to present the following facts:

 * Phison management has not participated in any recent interviews with the author of the above-mentioned broker report.   

 *The above-mentioned report offers a short-term macro call, assuming a negative impact from COVID-19 across the memory device supply chain.

 *Since 2016, Phison’s earnings have consistently been NT$20/share or above, and ROE has averaged 21%. We have observed one analyst’s earnings projections to be consistently low and fluctuate considerably. This analyst’s initial EPS projections for the years 2016, 2017 and 2018 were 17%, 26% and 51% lower than Phison’s actual results.

 *This analyst’s current 2020 and 2021 EPS forecasts of NT$17.1 and NT$14.3 are well below Bloomberg market consensus of NT$24.3 and NT$26.3, respectively.

 *We welcome all sell-side analysts to personally contact our team to get a fuller understanding of our outlook for 2020 & 2021, and to gain a deeper understanding of downstream memory device industry fundamentals and earnings – which are not as volatile as those for upstream producers. Please contact our investor relations team: This email address is being protected from spambots. You need JavaScript enabled to view it.

Phison Clarification:

 *The global spread of the COVID-19 virus has introduced considerable uncertainty regarding the downstream demand outlook, not only in the tech industry, but for the entire global economy.

 *Our RD center and most of our module manufacturing facilities are located in Taiwan, and all operations are currently normal. Our production levels have not been significantly impacted by the virus outbreak. Supply from our major upstream suppliers locally and overseas remains uninterrupted. Additionally, our key downstream clients have not cut order volumes and are accepting our shipments on schedule.

A Comment from Phison’s Chairman & CEO KS Pua:

According to KS Pua, Phison Chairman and CEO, “Given the current strength in demand for SSD hard drives from PC OEMs and the expected introduction of new gaming consoles by leading brands in 2H20, NAND flash pricing and demand trends are currently favorable. As a NAND flash controller IC and module system provider, we are confident that our unique business model can produce consistently strong cashflows and profits over the long-term, amidst challenges presented by competitors and memory chip market cycles. We maintain long-term partnerships with our NAND FLASH supply sources and with our downstream module customers; and expect these partnerships to remain strong in the future. We look forward to growing our business scale and market share together with our business partners this year and for many more to come.”