Local PC cooler maker Asia Vital Components Co Ltd (AVC, 奇鋐) yesterday inked an agreement with China South Locomotive and Rolling Stock Corp’s (CSR, 中國南車) Photovoltaic (PV) inverter unit to obtain a 45 percent stake for 18 million yuan (US$2.8 million), aiming to expand its new PV inverter business. PV inverters are widely used in mass transportation systems.
Based on the contract, AVC would subscribe to new shares in CSR Zhuzhou Electric Locomotive Research Institute Co Ltd (南車株洲電力機車研究所), a fully-owned unit of CSR.
CSR is one of China’s two biggest locomotive and rolling stock providers and it has started shipping its products to European customers.
“We believe this deal will help us extend our business to new areas of the rolling stock sector, such as light rail transport,” AVC chairman Spencer Shen (沈慶行) told a media briefing yesterday. “PV inverters will become one of the company’s most important products to drive revenues.”
CSR Zhuzhou vice general manager Zeng Hongping (曾鴻平) told reporters that the company expected annual revenue to expand from 100 million yuan last year to at least 800 million yuan in 2015
AVC is gearing up its diversification into high-margin products after entering LED general lighting and touch panel module manufacturing.
“Railway inverters is a business with a high threshold and less competition [compared with the IT sector]. We can leverage CSR’s [strong] market position in China,” AVC chief operating officer David Wang (王瑞賓) said.
CSR supplies rail systems including locomotives and light rail transport systems to southern areas of China, while China CNR Corp (中國北車) dominates the railroad systems market in the north.
Last year, AVC generated 80 percent of its NT$20.28 billion (US$704.9 million) in revenues from selling cookers and inverters used in notebook computers, desktop computers and communication and networking products.
AVC counts China’s top PC maker Lenovo Group Ltd (聯想), telecoms equipment maker Huawei Technologies Co (華為) and mobile phone maker ZTE Corp (中興) among its customers.
AVC made NT$205 million, or NT$0.71 a share, in the first quarter, down from NT$244 million, or NT$0.9 a share, in the first quarter of last year.