Giant Manufacturing Co (巨大機械), Taiwan’s largest bicycle maker, on Monday announced that its revenue grew 1.71 percent annually in the first two months of the year as sales in China rose.
Giant reported revenue of NT$8.25 billion (US$272.01 million) from January through last month, up from NT$8.11 billion a year ago, according to the company’s filing with the Taiwan Stock Exchange.
“Our revenue in the first two months benefited from a 10 percent annual growth in our China sales from January through last month,” Giant spokesman Hsu Li-chung (許立忠) said by telephone yesterday.
Sales in China accounted for 28 percent of Giant’s overall revenue over the two-month period, he added.
However, the firm’s European sales declined significantly in the past two months from a year ago, while those in the US remained flat over the same period, Hsu said.
The bicycle maker said that it has set an annual revenue growth target of between 5 and 10 percent for the year.
As competition from its Chinese peers intensifies, Giant expects the growth of its sales in the country to drop to 10 percent this year from more than 20 percent a year ago, Giant chief executive officer Antony Lo (羅祥安) said earlier this month.
“We think that China is now a mature market instead of a fast-growing, emerging market for bicycles,” he said.
As for its brand designed especially for female riders, the company said sales of “Liv” brand products currently account for 20 percent of its overall revenue, up from 10 percent last year.
The company established Liv as a Giant sub-brand six years ago and elevated it to an individual brand earlier this month to cater to the growing number of female customers worldwide.
“The global trend is that bicycles are going to become increasingly more specialized and customized to suit the rider’s needs,” Lo said.
Meanwhile, Merida Industry Co (美利達), the nation’s No. 2 bicycle maker, reported revenue of NT$3.53 billion from January through last month, posting a 5.56 percent rise from NT$3.34 billion the previous year, the company’s stock exchange filing showed.
Merida’s shipments rose 1.2 percent to 311,076 units in the first two months of the year compared with a year ago, it said.
The company expects its sales across the Taiwan Strait to grow by 20 percent this year on the back of its growing capacity and rising number of shops in China.
Merida’s new plant in China’s Jiangsu Province can churn out 500,000 bicycles a year and will become operational this year, it said, adding that it aims to have 2,500 outlets across the strait by the end of the year, up from 2,200 at the end of last year.
HSBC Securities forecast Giant’s revenue to grow 5.51 percent to NT$57.26 billion this year, while Merida would likely see its revenue increase by 7.76 percent to NT$27.3 billion.
However, the bank expects both companies to see slower growth in the face of tougher competition in China in the future and because of the long replacement cycles for their high-end bicycles, HSBC analyst Abel Lee (李忠翰) wrote in a research note on Monday.