Sat, Apr 14, 2018 - Page 11 News List

Feng Tay profits remain flat despite revenue rise

By Kuo Chia-erh  /  Staff reporter

Feng Tay Enterprises Co (豐泰企業), a key supplier of Nike Inc, posted net profit last quarter that remained flat from the previous year, despite an increase in revenue.

Net profit totaled NT$762.82 million (US$26.03 million) in the January-to-March quarter, or earnings per share of NT$1.14, the company said in a filing with the Taiwan Stock Exchange on Thursday.

Cumulative revenue totaled NT$14.82 billion last quarter, representing a 9.08 percent annual increase from NT$13.59 billion, after the Yunlin County-based company shipped 26.8 million pairs of shoes over the period, a 10.3 percent increase from a year earlier.

It expects to ship 28 million pairs of shoes in the second quarter, up 11 percent from same period last year, the company said on its Web site.

Analysts said Feng Tay is expected to secure more orders from Nike, thanks to its continued capacity expansion at its overseas production bases, which would benefit the company’s bottom-line performance.

“We expect solid earnings growth for Feng Tay this year, as it has seen sales volume pick up since the fourth quarter of last year, and its average selling price in US dollar terms rose to 3 percent year-on-year in the first quarter, reflecting Nike’s recovery in the North American market,” Yuanta Securities Investment Consulting Co (元大投顧) said in a client note on Thursday.

“Most importantly, Nike has raised its forecasts for next year, as it expects high-single-digit revenue growth year-on-year. Thus, we expect Feng Tay, with 80 percent sales contribution from Nike, to benefit from the company’s accelerating sales growth,” Yuanta added.

Feng Tay — which has production bases in Vietnam, India, Indonesia and China — is expected to supply 20 percent of the US brand’s total shipments by 2020, up from its current 16 percent, KGI Securities Investment Advisory Co (凱基投顧) said in a note last week.

As the company is planning to launch more automated production lines at its plants in China and Vietnam, it is likely to make itself stand out from its medium-sized peers with higher technological thresholds, KGI said.

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