Tue, Dec 24, 2013 - Page 13 News List

Shoe sole maker plans share issue to fund new plant

CHINA PLANT:Victory New Materials is to use the proceeds to build a new factory to expand production using its new shoe sole technology

By Camaron Kao  /  Staff reporter

Victory New Materials Ltd (勝悅新材料), which makes polymer shoe soles, yesterday said it plans to issue 8.1 million new common shares to finance construction of a new plant.

The company has tentatively set the subscription price between NT$90 and NT120 to raise between NT$729 million (US$24.31 million) and NT$972 million in fresh funds, chief financial officer Peter Chen (陳圖炎) told reporters.

Proceeds from the share issue will be used to build a new factory on a 10,000m2 plot in Jinjiang in China’s Fujian Province, with construction expected to begin next month and scheduled for completion by the end of 2015, Chen said.

The new factory will use a new technology developed by the company that can inject two different materials into a mold to make a shoe sole, Chen said.

From January through last month, the company reported a revenue of NT$2.39 billion, up 28.82 percent from NT$1.85 billion a year ago, according to the company’s filing to the Taiwan Stock Exchange.

Chen said the company benefited from the recovery of the shoemaking industry in China this year, as overproduction last year eased and inventory levels dropped, and shipments of shoe soles made from its new injection molding technology rose.

Shipments are expected to rise to 26 million pairs this year from 23 million pairs last year, Chen said.

Shipments next year are forecast to reach between 29 million and 30 million pairs, he added.

During the first nine months of the year, the company posted a profit of NT$495.15 million, up 30 percent from the previous year, due to the higher-margin shoe soles, the company said.

The company estimated that earnings this year would reach NT$700 million, rising 31.96 percent from NT$530.46 million the previous year.

Victory trades on the smaller Emerging Stock Market (興櫃市場), but will be moving to the main board in the middle of next month.

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