Lu Hai Holding Corp (六暉), which makes valve stems for tires, yesterday said sales could rise 10 percent to 15 percent next year from this year as the company enhances its utilization rate in a new Indonesian factory to 60 percent from 25 percent.
“We have received approvals from our clients to ship products to them from our Indonesian factory this quarter, which will increase our revenue next year,” company chairman Wu Chin-lu (吳金鹿) said at an investors’ conference.
Lu Hai’s Indonesian factory can make 6 million valve stem units a year when operating at full capacity, while the company’s total capacity is 46 million units a year.
Shipments of tire pressure monitoring systems, which currently account for 2 percent of its annual revenue, will rise to 600,000 units a month from 300,000 this year, as most of the systems previously installed will need to be replaced, Lu Hai general manager Simon Hsu (許廉凱) said, adding that the systems are of higher gross margin than the company’s other products.
During the January-to-October period, Lu Hai reported revenue of NT$1.93 billion (US$651.59 million), up 7.53 percent from NT$1.79 billion a year ago, according to the company’s filing to the Taiwan Stock Exchange.
The company posted profit of NT$73.3 million, or NT$1.22 per share, in the first three quarters of the year, up 17.2 percent from NT$62.54 million, or NT$1.04 per share a year ago, the filing said.
However, Lu Hai booked losses of NT$11 million last quarter because of foreign exchange rate fluctuations.
The company expects to swing into profit this quarter as the exchange rate stabilizes and estimates a full-year profit of NT$115 million for this year.
The company is set to debut on the main bourse on Dec. 25 by issuing 75.4 million shares at around NT$25 per share.
The company said it would use the proceeds to repay debts and hedge against exchange rate changes.
Lu Hai is a China-based Taiwanese company. It has had production lines in the Chinese cities of Xiamen and Kunshan for more than 30 years, and opened a production base in Indonesia in 2011.
The Cayman Island-registered tire valve maker is capitalized at NT$601 million (US$20.03 million), according to a prospectus submitted to the Taiwan Stock Exchange.
It counts Taiwan’s Cheng Shin Rubber Industry Co (正新橡膠), Kenda Rubber Industrial Co (建大輪胎) and Hwa Fong Rubber Industry Co (華豐橡膠), as well as Indonesia’s PT Gajah Tunggal Tbk and South Korea’s Dong Ah & Rubber Co, among its major customers.