Sat, Jan 21, 2017 - Page 12 News List

Chun Yuan Steel bullish on China

By Kuo Chia-erh  /  Staff reporter

Chun Yuan Steel Industry Co (春源鋼鐵) on Thursday said it expects revenue contribution from China to increase from 25 percent to 30 percent this year, aided by Beijing’s supply-side reforms.

China has been cutting steel capacity to solve oversupply problems. The nation’s target to cut steel capacity by 45 million tonnes last year was achieved by the end of October, China’s National Development and Reform Commission said in November last year, with further plans to cut annual capacity through 2020.

“We are upbeat about the business outlook in the Chinese market, because China’s recent reforms have ensured price stability in the industry,” Chun Yuan spokesman Hung Shih-ming (洪士民) said on the sidelines of an investors’ conference in Taipei.

“In addition, improving demand in China’s construction industry is expected to boost our shipments this year,” Hung said.

Headquartered in Taipei, Chun Yuan provides hot-rolled steel sheets, electrical steel, steel products for structural engineering and automated storage systems.

The 52-year-old company operates five subsidiaries in China, as well as factories in New Taipei City’s Sijhih District (汐止), Taoyuan’s Longtan District (龍潭) and Kaohsiung’s Siaogang District (小港).

At the investors’ conference, Chun Yuan chairman Li Wen-lung (李文隆) gave an optimistic sales outlook for the company’s galvanized steel plates this year, saying that robust demand is expected to stimulate revenue during the first quarter of this year.

The company posted revenue of NT$16.65 billion (US$528 million ) for last year, a 0.48 percent increase year-on-year, on the back of a diversified product portfolio.

The company has not released its full-year earnings for last year.

In the first three quarters, net profit soared 89.5 percent to NT$533.03 million from the previous yea.

Its gross margin improved from 6.25 percent to 9.79 percent in the same period, data showed.

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