May 7--Synnex (Thailand) expects net profit to stay flat or drop slightly this year, a substantial improvement from its earlier forecast of a 20 percent contraction in net profit, saying the industry is performing better than expected.

President Supant Mongkolsuthree said the IT hardware industry valued at 70 billion baht yearly contracted by 3 percent in the first quarter.

"The first three months were down, but March showed a little improvement, especially in the hard-disk sector, where export demand improved due to inventories running out," he said yesterday.

"I expect the industry to continue to pick up throughout the year with more signs apparent in the latter half."

With signs of a recovery and moves to increase market share, Synnex hopes for a 5 percent increase in revenue this year.

It has also adopted cost control measures, with better inventory management and logistics. The measures should reduce its annual expenses from more than 4 percent of revenue to 3 percent and should show results by the second quarter.

"Our net profit this year should be as close to last year's as possible, that is the best we can do," Mr Supant said, adding that the company hoped to be able to pay dividends to investors.

SET-listed Synnex recorded a net profit of 122.98 million baht on 12 billion baht in revenue last year.

It plans to increase market share to 20 percent from 18 percent by offering longer credit terms to dealers with good records.

Longer credit terms are expected to increase its non-performing loans to about 0.1 percent of revenue or 13 million baht this year. Mr Supant insists this level is still acceptable as the company gains more benefits from strengthening the dealer chain.

"In the first quarter, we still have not seen dealers closing down despite poor sales in the economic downturn, but we have seen slight delays in payments from some dealers," he said.

Synnex hopes to gain from government plans to replace older computers.

"We are already strong in the notebook segment and [computer] components are the segment we have been trying to improve," he said.

Shares of Synnex (SYNEX) closed yesterday on the Stock Exchange of Thailand at 124 baht, up two satang, in trade worth 165,000 baht.

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