Analysts said that they remain optimistic regarding Merida Industry Co (美利達), despite the bicycle maker’s weaker-than-expected revenue last month.
Consolidated revenue fell 2.95 percent from a year earlier to NT$1.92 billion (US$61.98 million), the first annual decline since September last year, according to data released by Merida last week.
Shipments also decreased by 3.72 percent year-on-year to 92,102 units, company data showed.
“Merida is a veteran e-bike maker. E-bike sales growth, the bright spot for the firm’s long-term operations, will more than compensate for weaker sales of its traditional bicycles in China,” SinoPac Securities Investment Service Corp (永豐投顧) said in a note on Monday last week.
In addition, US President Donald Trump’s punitive tariffs on Chinese goods have had limited effect on Merida, as the company’s exports to the US are mostly manufactured in Taiwan, SinoPac said.
“Last month’s revenue was much lower than the NT$2.6 billion that we originally predicted, which was caused by a delay of key components and a decline in China’s bicycle market,” Jih Sun Securities Investment Consulting Co (日盛投顧) said in a note on Thursday.
Sales in China continued to come under pressure due to weakening domestic demand and the effect of higher US tariffs, Jih Sun said.
However, Capital Investment Management Corp (群益投顧) said the company’s declining revenue was mainly due to product mix changes, with e-bike shipments the key to higher revenue for Merida.
“Previously, when the company’s plant in Taiwan delivered more high-end bicycles and electric bicycles, a small increase in shipments drove up revenue considerably. However, in September, the company’s plant in Taiwan posted a substantial increase in shipments, but its revenue grew only slightly, suggesting product mix changes,” Capital Investment said on Friday.
Merida reported cumulative revenue of NT$19.93 billion in the first nine months of the year, up 19.74 percent from the same period last year, but shipments decreased 4.85 percent to 917,019 units over the period, company data showed.
Despite declining sales in China, which accounted for nearly 10 percent of Merida’s revenue, the company still posted double-digit percentage growth in revenue during the January-to-September period on the back of surging sales of high-end bicycles and e-bikes produced in Taiwan, Jih Sun said.
Revenue generated by Taiwanese operations reached NT$1.71 billion last month, up 1.41 percent year-on-year, with shipments rising 22.59 percent to 79,976 units, company data showed.
From January to last month, cumulative revenue in Taiwanese operations totaled NT$17.2 billion, an annual increase of 33.16 percent, and shipments over the period reached 726,355 units, up 27.34 percent, the data showed.
The fourth quarter is the peak season for electric bicycles, so Jih Sun forecast that Merida’s e-bike shipments would increase to between 145,000 and 155,000 units this year, from 93,300 units last year, and that orders for next year would likely grow by 40 to 50 percent from this year.
Merida’s stock price increased 2.33 percent to NT$132 in Taipei trading on Friday. The stock has advanced 5.6 percent so far this year.
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