Automobile parts maker Cub Elecparts Inc (為升) yesterday said it was aiming for profit of NT$10 per share this year, up from NT$6 last year, backed by strong demand for its tire pressure monitoring systems.
Shipments of the tire pressure monitoring systems are forecast to hit 1.2 million units this year, from 500,000 units a year ago, Cub Elecparts chairman Yu Shan-Chuan (尤山泉) said.
Sales of the systems are expected to account for 30 percent of the company’s total revenue this year and should help lift its net profit by 66.67 percent this year from last year’s NT$363.84 million (US$12.1 million), Yu said.
Cub Elecparts reported a revenue of NT$1.54 billion last year, up 11.59 percent from NT$1.38 billion a year ago.
The company has a factory in Shanghai, which has an annual capacity of 1.8 million units. It is planning to add one more production line at the Shanghai factory at the end of June and another new line in Taiwan by the end of the July, raising its total capacity to 5.4 million systems a year, Yu said.
The company is to use proceeds from the sale of NT$200 million in convertible bonds last year to finance its capacity expansion this year, he added.
Forecasting market demand for the systems, Yu said there are currently 400 million tire pressure monitoring systems in use in cars in the US, most of which were installed in 2007 and will have to be replaced within seven years.
Yu expects US demand for the system to be higher than last year’s 8 million units.
As for Europe, governments in the region are requiring car owners to start using winter tires in the winter this year, which should increase sales of tires and their monitoring systems, Yu said.
The company aims to sell 200,000 units to Europe this year, up from about 10,000 units a year ago, he said.
The company has a patent of 20 years for its system, which was developed in 2010 and fits most types of cars worldwide, he said.
Cub Elecparts sells about 70 percent of the systems in the vehicle aftermarket and 30 percent to automakers. Yu said the company's products fetch a higher price in the aftermarket and enjoy a gross margin of around 50 percent, higher than 30 percent for other brands, he added.
Yu was speaking at the Taipei Auto Parts & Accessories Show and the Taipei International Automobile Electronics Show. The shows opened yesterday and run through Saturday at the Taipei World Trade Center’s Exhibition Hall 1 and Nangang Exhibition Hall.
Cub Elecparts shares rose 3.11 percent to NT$265 yesterday, having surged 281.29 percent over the past 12 months, compared with the TAIEX's 15.55 percent increase over the same period.