Ginko International Co (金可國際), which makes contact lenses and lens-care solution, on Tuesday forecast double-digit sales growth as it aims to elevate revenue contribution from Asian markets apart from China.
At an investors’ conference in Taipei, the company set a target to achieve 15 percent revenue contribution from non-China markets in the next three years.
The firm recently acquired rights to sell Hydron (海昌) brand contact lenses in Japan, Thailand and Malaysia.
The company said it would also improve its product mix and margins after posting disappointing second-quarter results that fell short of analysts’ forecasts.
Ginko said that in the long run, it aims for a 20 percent sales contribution from higher-priced Taiwan-made products, 50 percent from Hydron brand products and 30 percent from Horien (海儷恩) brand products.
In addition, the company said it plans to add four more productions lines in Taiwan next year to make its premium products, replacing China-made products.
In the April-to-June quarter the company reported that net income dipped to NT$396 million (US$12.59 million), 5.8 percent lower than the same period last year. Sales during the period rose 11.1 percent from last year to NT$1.63 billion, company data showed.
Gross margin in the period fell from 61 percent to 56.7 percent during the January-to-March period, due to increased sales contribution from less-profitable daily disposable products, Ginko said.
In particular, average retail prices in China fell, while sales volume grew by a low to mid-teen percentage in the second quarter on account of the relatively low market penetration of contact lenses there, the company said.
However, the company said that increasing e-commerce sales in China, which is becoming a vital outlet for older out-of-season products, added more pressure to its margin performance.
Even so, the company has benefited from prolonged product cycles, Ginko said.
It said that in each two-to-three-year product cycle, new releases might command price premiums of up to 10 percent, while older goods might be exhausted through heavily discounted online sales.
Second-quarter earnings were affected by a weakening yuan and a NT$55 million foreign-exchange loss from its US dollar-denominated debt as the New Taiwan dollar depreciated, the company said.
Ginko said its operating efficiency would improve in the second half of the year, as the company plans to scale back marketing expenses.
Ginko shares yesterday gained 1.09 percent to NT$324.5 in Taipei trading, Taiwan Stock Exchange data showed.
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