Wistron, having survived the difficult times over the past two to three years, is seeing rapid growths for its high-margin products and expects its gross margins and operating profit margins to improve in 2018, according to company chairman Simon Lin.

Wistron has reported consolidated revenues of NT$836.08 billion (US$28.59 billion) for 2017, up 26.7% on year. Net profit for the year came to NT$3.89 billion, up 31.22% on year, with EPS reaching NT$1.48, up 23.33%. But its gross margin for 2017 went down 1.02pp on year to 3.78%, and its operating profit margin dropped 0.2pp on year to 0.71%.

Lin pointed out that Wistron will still see gross margins slip for a couple of quarters in 2018, but the overall performance in 2018 will improve from 2017, as the company will complete the learning process for handling some of its orders in the near future. He added that increasing demand for its high-margin IPCs and Internet of Things (IoT) products will help boost the company's overall gross margin.

For 2018, Lin expects the overall PC market to continue shrinking, but Wistron will be able to maintain its shipments and market ranking. The company's smart device business will continue witnessing significant growths, while the datacenter server business will see a similar trend.

The company said its operating profit margin decreased in 2017 due to increased operating expenses, but the rising component prices played no part in the the profit margin decline. The company still managed to achieve net profit in 2017 mainly thanks to contributions from non-operating incomes generated from currency exchange, profits from subsidiary Wiwynn's operations, and subsidiary AOpen selling stocks.

For the fourth quarter of 2017, Wistron registered consolidated revenues of NT$261.6 billion (US$8.89 billion), up 23.26% sequentially; net profits of NT$1.6 billion, up 74.51% sequentially, with EPS arriving at NT$0.61; gross margin of 3.57%, down 0.36pp sequentially; and operating profit margin of 0.88%, up 0.09pp sequentially.

Although Wistron did not provide any detail on its increased operating expenses, some market watchers believe the increases were related Apple's iPhone orders.