Shares in the nation’s leading manufacturers of bicycles have far outperformed the broader market over the past 12 months, mainly because of their rapid expansion into emerging markets, in particular China.
Merida Industry Co (美利達), the nation’s No. 2 bicycle maker, has seen its shares rise 77.78 percent in the past 12 months, while those of Giant Manufacturing Co (巨大機械), the world’s largest producer of bicycles, have risen 17.99 percent over the same period.
In comparison, the benchmark TAIEX has declined 2.19 percent in the past 12 months, Taiwan Stock Exchange data showed.
Terry Liu (劉向晴), an analyst on Fubon Securities Co’s (富邦證券) equity research team, said yesterday that the two companies have benefited from stable demand for their higher-priced bikes in advanced markets, such as the US and Europe, as well as robust demand in China.
“Their capacity expansion in China is actually targeting demand for higher-priced bikes,” Liu said in a research note, adding that sales would grow by a double digit percentage in the next two years, driven by an uptick in both shipments and average selling prices.
‘NEAR-TERM CATALYST’
Fubon Securities said the introduction of higher-specification bicycles at the Taipei International Cycle Show, which runs until Saturday, would present a “near-term catalyst” for the two bike manufacturers’ shares.
The brokerage house forecast the shares would continue to outpace the TAIEX this year mainly due to stable demand in the upcoming high season and secular sector growth in the long term.
Merida has said that its Jiansu plant in China would start operations in the fourth quarter of this year, which Fubon estimated would eventually expand its annual capacity from 200,000 units to 2 million.
“In addition, the product line at the plant will be 60 percent for the domestic [Chinese] market and 40 percent for exports, which we believe will help the company weather the impact of seasonality by allocating its human resources and equipment more effectively, making earnings less volatile across the quarters,” Liu said.
Sales at Changhua Couty-based Merida expanded 13.3 percent year-on-year to NT$3.34 billion in the first two months of the year, from NT$2.95 billion a year ago, while Giant, based in Greater Taichung, saw its revenue increase 3.42 percent to NT$8.11 billion in the January-to-February period, from NT$7.84 billion a year ago, the companies said in separate stock exchange filings earlier this month.
Fubon placed an “add” rating on Merida’s shares and raised its target price to NT$195 from NT$130. The brokerage maintained its “neutral” rating on Giant shares, but increased its target price to NT$182 from NT$165.5.
In Taipei trading yesterday, Merida shares closed 0.59 percent lower at NT$168, while Giant shares were down 0.91 percent at NT$164.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last