Compal Electronics' notebook shipments in 2016 are expected to drop by 10% on year, as order visibility for the second half of the year remains unclear, according to company president Ray Chen.

Chen said pointed out that demand for notebooks is still weakening and Compal's notebook shipments are expected to drop by a single-digit percentage sequentially in the second quarter. Compal's notebook shipments in the first quarter were 7.9 million units.

Compal has announced its net profit for the first quarter of 2016 decreased 29.5% sequentially and 20.3% on year to NT$1.6 billion (US$49.1 million), with EPS reaching NT$0.37

Compal's consolidated revenues for the quarter totaled NT$176.65 billion, down 24.6% sequentially and 10.8% on year. But its first-quarter 2016 gross margin went up 0.3pp sequentially to 4.2%.

Compal shipped 40 million notebooks and all-in-one PCs together in 2015 and the volume is expected to drop 10% on year in 2016. Shipments of smart handheld devices including smartphones and tablets were 37 million units in 2015 and the volume is expected to enjoy a double-digit percentage growth. LCD TV shipments were 2.3 million units in 2015 and are expected to grow to 2.4-2.5 million units.

Compal's non-notebook businesses' revenue contribution grew from 25% in 2015 to 30% in the first quarter and is expected to stay at around 30% for 2016. The percentage is expected to increase further to 40% in 2017.

As for its notebook-manufacturing joint venture with Lenovo in China, Compal is planning to sell its 49% stake in the joint venture to Lenovo after October 2017. The joint venture was established in 2011 and shipped 20 million notebooks in 2015.

Chen also noted that the company has invested in the medical electronics businesses. One of the company's subsidiaries has landed orders for electronic health record systems and is currently focusing on expanding in Taiwan. The subsidiary will then turn to China and Southeast Asia markets.