Hiroca Holdings Ltd (廣華控股), a Taiwanese autoparts maker based in China, yesterday reported a net profit of NT$143 million (US$4.56 million) for the second quarter, down 24.92 percent from a year earlier due to its major clients’ inventory digestion, the company said.
Hiroca attributed the decline in net income for last quarter to the inventory adjustments of its Japanese clients Toyota, Honda and Nissan.
The three major Japanese clients accounted for about 60 percent of the company’s total revenue, while its customers from the US and Europe accounted for 33 percent, company data showed.
Aggregate revenues for the second quarter decreased 11.31 percent to NT$1.8 billion from a year earlier, the company said.
The company gave a positive outlook for the rest of the year.
Although this quarter is a slow season for the sector, Hiroca said new vehicle sales in China are expected to sustain growth in the third quarter, supported by government policies, such as a halving the 10 percent sales tax on small-engine cars.
Last month, Honda’s new car sales in China surged 39.5 percent from a year earlier.
The sales of Toyota and Nissan vehicles also increased 5.7 percent and 8.9 percent respectively from a year earlier, the company said.
Due to the increasing demand for cars, the period of inventory digestion might be shorter than expected, which could help boost Hiroca’s revenues, it said.
Hiroca is also targeting the US market, hoping to meet local demand for higher-priced car components, especially luxury car interior parts.
The company said the sales performance in the third quarter is expected to outpace the previous quarter, boost by a new plant in Mexico.
The plant, regarded as the company’s production base for the US market, is to become operational this quarter.
Hiroca shares gained NT$1 to close at NT$120 yesterday, Taiwan Stock Exchange data showed.
Established in 1999 in Dongguan, the company provides a wide range of products for global automobile manufacturers, engaging in the injection molding of automotive interior parts, water transfer printing and surface coating.
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