President Chain Store Corp (統一超商), the nation’s largest convenience-store operator, saw first-quarter net income soar 108.41 percent year-on-year to NT$1.61 billion (US$51.4 million), or NT$1.55 in earnings per share, its highest-ever first-quarter figure, the company said in a statement on Monday.
President Chain runs about 5,000 retail operations on both sides of the Taiwan Strait, including 4,750 7-Eleven stores in Taiwan.
The Taipei-based company attributed the positive first-quarter performance to a strong growth in its core business, which saw an increase of 45.02 percent in operating income to a record high of NT$1.26 billion for the quarter, the statement said.
Contributions from non-core investments, such as coffee chain President Starbucks Coffee Corp (統一星巴克), drugstore and cosmetics chain Cosmed (康是美), online book retailer Books.com (博客來) and home furnishings seller MUJI (Taiwan) Corp (無印良品), also helped boost first-quarter profit 145.48 percent from NT$654 million in the previous quarter, the statement said.
“While we were expecting strong results, the numbers still came in as a positive surprise,” Credit Suisse analyst Sidney Yeh (葉昌明) said in a client note yesterday. “Strength was seen in core profit as well as in non-core items.”
President Chain delivered a strong operating margin of 4.7 percent in the first quarter, compared with an average of 3 to 3.5 percent for most companies in the quarter, which should help ease most investors’ concerns about margin erosion, Yeh said.
First-quarter revenue totaled NT$26.89 billion, up 11.39 percent year-on-year, representing the biggest increase since the first quarter of 2007, which the company attributed to “improvement in store quality and adjustment in merchandise structure.”
Sales of fresh food items, for instance, increased by nearly 30 percent year-on-year in the first quarter. Sales of publications and beverages also registered double-digit growth in the quarter, while those of City Cafe coffee surged more than 80 percent from a year ago, the company said.
President Chain’s first-quarter revenue was up 3.81 percent from NT$25.9 billion in the previous quarter and marked the highest quarterly revenue since the third quarter of 2008.
The company said it targeted increasing per-store daily sales and hoped to post another record revenue this quarter as domestic consumption recovers.
Shares of President Chain closed 2 percent higher at NT$86.6 on the Taiwan Stock Exchange yesterday, compared with a 0.14 percent decline on the TAIEX.
Yeh offered a target price of NT$98 for President Chain, citing the company’s strong profit outlook in Taiwan for this year and on-track expansion in China, while Daiwa Securities analyst Yoshihiko Kawashima gave a target price of NT$101 for the stock.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
’WHITE BOX’: The open platform would give local firms access to Cisco’s cloud-based mobile network to develop 5G telecom equipment and tap into the global market The Ministry of Economic Affairs (MOEA) yesterday introduced a new 5G “open lab” in collaboration with US-based information technology and networking giant Cisco Systems Inc to address the rapidly growing “white box” 5G networking equipment market. The open lab will be a platform where Taiwanese manufacturers can access Cisco’s cloud-based mobile network to develop their own 5G telecom equipment, such as small-cell base stations, network switches, modems and Internet of things (IoT) devices, a ministry statement said. The open platform would allow Taiwanese manufacturers to tap into the lucrative 5G telecom equipment market, which was previously monopolized by Nokia Oyj, Ericsson AB
Nintendo Co is raising its target for Switch production to about 25 million units this fiscal year, people familiar with the matter said, as the ongoing COVID-19 pandemic keeps lifting demand and component shortages ease. The Kyoto, Japan-based company, which in April hiked orders to 22 million units by March next year, is asking partners to tack on another few million units, said the people, who did not want to be identified discussing internal goals. Assembly partners plan to work at maximum capacity through December. The new production target suggests that Nintendo is likely to outperform its Switch sales forecast of 19 million
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president