Thu, Feb 15, 2018 - Page 12 News List

Airtac borrows NT$6bn to fund capacity expansion

By Kuo Chia-erh  /  Staff reporter

Airtac International Group (亞德客) on Monday inked contracts with local lenders for a NT$6 billion (US$204.5 million) syndicated loan to expand its factory capacity in Tainan.

The five-year loans, provided by 12 domestic banks led by state-run Mega International Commercial Bank (兆豐銀行), would be used to build capacity at Tree Valley Park (樹谷園區), Airtac said in a statement.

The company said it would also use the funds to refinance its existing debt obligations and strengthen its working capital.

As part of the expansion plan, the company is to allocate a capital budget of NT$1.1 billion to build two plants in Tainan this year, focusing on the production of linear guideways and ball screws, Airtac said.

Cayman Islands-incorporated Airtac is the second-largest pneumatic component supplier in China, behind Japan-based SMC Corp.

The company posted revenue of NT$1.39 billion for last month, a 75.54 percent jump from NT$791.04 million during the same period last year, supported by surging demand for machinery components in China, the company’s biggest market.

Despite the robust demand, the company’s growth momentum is likely to decelerate this year, after its annual earnings growth peaked in the third and fourth quarters of last year, Yuanta Securities Corp (元大證券) said in a note on Wednesday last week.

“This upcycle has lasted for 25 months and we doubt it can run much longer,” Yuanta analyst Steve Huang (黃柏璁) said in the note. “From a cyclical perspective, we maintain our neutral view for now and will turn more constructive once a better risk-reward profile emerges.”

However, KGI Securities Co (凱基證券) said Airtac’s growth outlook would remain intact this year, aided by its higher capacity utilization rates and rising linear guideway sales from the second quarter.

The company’s revenue is forecast to increase by 22.3 percent to NT$16.78 billion this year from NT$13.72 billion last year, while operating margin could gain 1.6 percentage points to 31.8 percent, KGI analyst Angus Chuang (莊政翰) said in a note on Wednesday last week.

Airtac shares on Monday closed at NT$492, and have dropped 8.04 percent so far this year, compared with the broader market’s 2.08 percent decline over the same period, Taiwan Stock Exchange data showed.

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