Wed, Mar 25, 2015 - Page 13 News List

Hiwin posts profit growth, buys stake in Luren Precision

By Lauly Li  /  Staff reporter

Hiwin Technology Co (上銀科技), which produces linear guideways and ballscrews, on Monday said its net income rose 15.03 percent year-on-year to NT$2.26 billion (US$72.5 million) last year, or NT$9.16 per share, on the back of the rising demand for industrial automation.

The company also announced the purchase — at a cost of more than NT$100 million — of a 41.93 percent stake in Hsinchu-based Luren Precision Co (陸聯精密), which manufactures gear-cutting tools, spin pumps and machinery, in a bid to further develop industrial automation.

Hiwin chairman Eric Chuo (卓永財) told a news conference that the company is making steady progress in industrial automation, and has started to ship new industrial and medical robots this quarter.

Hiwin ships more than 100 industrial robots per month, Chuo said.

With production running at full capacity, the company recently rented two plots of land in Taichung, with plans to increase production lines for its industrial robot parts, he said.

“This [procurement] is the last piece of puzzle for us to complete our plan in industrial automation advances,” Chuo said.

Industrial automation accounted for 8 percent of Hiwin’s total revenue last year, and the figure is predicted to grow to 10 percent this year, fueled by growing industrial robot shipments, he added.

“Sales for this quarter will outperform last year’s NT$3.01 billion, given rising orders for Hiwin’s ballscrews and linear guideways since the beginning of this year,” Chuo said.

Sales for next quarter would be better than this quarter, and this year’s revenue would outpace last year’s NT$15.08 billion, he said.

On the back of the solid demand for industrial automation, JPMorgan Securities Ltd yesterday forecast that Hiwin’s revenue for this year would grow by 15 to 20 percent over last year’s.

However, JPMorgan said Hiwin’s gross margin could be affected by the weak euro in the near term.

The firm’s gross margin was 37 percent in the previous quarter, 1 percentage point lower than JPMorgan’s estimate.

As Europe accounted for 20 to 25 percent of Hiwin’s revenues, JPMorgan said “every 10 percent depreciation in the euro against the New Taiwan dollar would erode Hiwin’s gross margin by 1 percentage point.”

The good news is that Hiwin has considered raising prices to offset the weak euro influence, JPMorgan said.

Hiwin shares plunged 6.12 percent to NT$253 in Taipei trading yesterday, underperforming the TAIEX, which lost 0.27 percent.

The company’s board on Monday approved a proposal to distribute cash dividends of NT$3.2 and a stock dividend of 3 percent per share. That represents a cash dividend yield of 1.26 percent.

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