Despite a slowdown in the shoemaking industry, Taiwan Paiho Ltd (台灣百和), one of the nation’s leading shoelace and elastic tape manufacturers, has seen 39.9 percent annual growth in net profit for the first half of this year amid the development of the virtual reality (VR) industry.
In the first six months, the sports goods and apparel accessories maker reported net profit of NT$745.63 million (US$23.25 million), with earnings per share rising to NT$2.5, company data showed. Revenue totaled NT$5.2 billion, up 14.7 percent from NT$4.53 billion a year earlier.
Paiho’s revenue growth can be partly attributed to HTC Corp’s (宏達電) Vive VR headset.
Paiho has joined the supply chain of HTC’s wearable business, providing elastic jacquards, molded hooks and foam processing for VR products, the Paiho said earlier this year.
Daiwa Capital Markets Inc said that new shoe and VR products could help boost Paiho’s revenue.
“Paiho has pitched a second bid to provide for HTC’s VR products... Paiho has started to supply foam processing products to Google [Inc] from last month and Facebook could likely be its next client,” Daiwa said in a report on Wednesday.
Last month, Nike Inc said orders for the North American market in the third quarter would grow only 6 percent annually after reporting a weaker-than-expected performance in the first half.
However, Paiho — a Nike supplier — faces limited effects from the client, as it has a diversified client base, analysts said.
Yuanta Securities Investment Consulting Co (元大投顧) analyst Peggy Shih (施姵帆) said Paiho’s bargaining power on pricing is better than other contract shoemakers, while the firm’s new product development has helped boost revenue and margins.
Paiho shares expanded 4.28 percent to NT$95.1 in Taipei trading yesterday, Taiwan Stock Exchange data showed. They have outperformed the local main bourse by nearly 24 percent so far this year, reflecting investor optimism in the firm’s outlook.
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