The nation’s two major cement makers are likely to experience a fruitful year, as product prices in the Chinese market are expected to remain at high levels, investment consultancies said.
Taiwan Cement Corp (台灣水泥) is forecast to generate net profit of NT$16.48 billion (US$556.1 million) for the whole of this year, a 117 percent surge from NT$7.6 billion last year, Taishin Securities Investment Advisory Co (台新投顧) said in a note on Wednesday last week.
Earnings per share (EPS) would reach a record-high NT$3.88, compared with last year’s NT$2.03, Taishin Securities said.
Taiwan Cement’s revenue is forecast to grow 21.6 percent annually to NT$119.52 billion from NT$98.31 billion, with gross margin increasing 9.7 percentage points to 28.96 percent, Taishin said, attributing its optimistic estimate to expected price hikes in the Chinese market.
Beijing’s ongoing plan to transform its cement industry by imposing more stringent environmental standards and related taxes helped push China’s benchmark cement price to 420.7 yuan (US$66.43) per tonne last quarter, up 6.5 percent from the previous quarter, Taishin said.
Beijing’s tightened measures could eliminate unqualified competitors that cannot meet standards, it said.
Taiwan Cement could also start to fully recognize the profits generated by its Chinese subsidiary, TCC International Holdings Ltd (台泥國際集團), Taishin added.
Taipei-headquartered Taiwan Cement saw its net profit last quarter jump 164 percent to NT$2.58 billion from NT$832 million on an annual basis, while sales rose 14.2 percent to NT$24.18 billion from NT$21.18 billion.
Separately, Yuanta Securities Investment Consulting Co (元大投顧) gave positive guidance on Asia Cement Corp’s (亞洲水泥) profitability this year, saying that the company’s earnings might reach the highest level since 2014, thanks to price hikes in China.
“Gross profit per tonne of Asia Cement’s China business reached a five-year high in the fourth quarter of last year, and that momentum is likely to expand further in the first half of this year,” Yuanta analyst Leo Lee (李侃奇) said in a note on Tuesday last week.
Cement prices in China have returned to an upward trend after inventory digestion almost finished last month, Yuanta said.
The consultant forecast that Asia Cement’s net profit could expand 53 percent to NT$8.37 billion this year from NT$5.47 billion last year, with EPS of NT$2.66.
Asia Cement has yet to release its earnings results from last quarter, but reported that first-quarter revenue expanded 32.37 percent year-on-year to NT$16.57 billion from NT$12.52 billion during the period last year.
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to