Tue, May 02, 2017 - Page 12 News List

Tsang Yow predicts 20% Q2 revenue surge

HOT MARKET:The revenue generated by its Chinese subsidiary is expected to contribute 60 percent of the firm’s total sales by the end of the year, an official said

By Kuo Chia-erh  /  Staff reporter

Auto parts supplier Tsang Yow Industrial Co (倉佑實業) yesterday said that it expects its revenue this quarter to grow more than 20 percent year-on-year, fueled by the fast-growing vehicle market in China.

The company, which mainly makes automotive powertrain components, posted record-high sales of NT$813.8 million (US$26.93 million) in the first quarter, a surge of 29.11 percent from the same period last year, a company filing with the Taiwan Stock Exchange showed.

Tsang Yow’s sales growth momentum is likely to extend into this quarter, thanks to optimistic sentiment in China’s auto market, a company official said by telephone yesterday.

In the first quarter, vehicle sales in China grew 7 percent on an annual basis to 7 million units, the China Association of Automobile Manufacturers said.

Driven by robust demand in China’s car market, the automotive parts maker said that since the fourth quarter of last year it has seen rising orders from its largest customer, Belgium-based Punch Powertrain NV.

Punch Powertrain, a first-tier automotive components supplier, provides continuously variable transmissions for major Chinese companies including Geely Automobile Holdings Ltd (吉利汽車) and BAIC Automotive Group (北京汽車).

The official, who declined to be named, said that revenue generated by the company’s Chinese subsidiary is expected to contribute 60 percent of total sales by the end of the year, and a monthly sales target of US$5 million has been set for its sales in China.

“Last quarter was the first time that revenue from the Chinese subsidiary surpassed sales from our Chiayi plant,” he said.

The revenue contribution of its China-based plants was nearly 55 percent last quarter, while the Chiayi plant accounted for 45 percent over the period, company data showed.

Apart from its core business of transmission components, Tsang Yow expects its compressors for automotive air-conditioning systems to be its next sales catalyst, saying that it began producing related parts for some Chinese customers at the beginning of the year.

In related news, Tsang Yow’s local peer, Laster Tech Corp Ltd (麗清科技), also reported record-high revenue for the first three months on the back of the booming China auto market.

In the January-to-March period, Laster saw its sales skyrocket 50.4 percent year-on-year to NT$1.02 billion, benefiting from strong demand in China’s automotive LED lighting sector.

Based in New Taipei City, Laster is the largest supplier of LED automotive lights in China.

The company’s Chinese customers include Great Wall Motor Co (長城汽車), the largest sports utility vehicle brand in the Chinese market.

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