Mon, Mar 11, 2019 - Page 16 News List

Airtac sees strong growth as IA looks poised to pick up

By Chen Cheng-hui  /  Staff reporter

Pneumatic components supplier Airtac International Group (亞德客) on Friday reported that consolidated revenue for last month rose by a stronger-than-expected 13.6 percent from February last year, the highest annual growth since June last year.

Last month’s revenue of NT$729.6 million (US$23.61 million) was still 37.72 percent lower than in January, while combined revenue in the first two months of the year totaled NT$1.9 billion, down 6.39 percent from the same period last year.

The Chinese market accounts for about 90 percent of Airtac’s total revenue and customers there are still taking a wait-and-see approach amid economic uncertainty and US-China trade tensions, KGI Securities Investment Advisory Co (凱基投顧) said, but added that it is positive about Airtac’s outlook.

Revenue in the first two months was 61.4 percent of KGI’s first-quarter estimate, which was higher than the average 56.2 percent over the past seven years and confirmed KGI’s view that the company’s business should stabilize by the end of this quarter, KGI analysts Angus Chuang (莊政翰) and Jenny Liu (劉昃恩) said in a note on Friday.

Meanwhile, machinery maker Hiwin Technologies Co (上銀) reported revenue of NT$1.5 billion last month, down 21.47 percent annually and 9.9 percent month-on-month.

Cumulative revenue in the first two months totaled NT$3.17 billion, a 23.96 percent decline from last year, Hiwin reported earlier last month.

However, Chuang and Liu said that there are emerging signs of order recovery for local industrial automation (IA) makers, which include Airtac and Hiwin.

“We believe the current downcycle of the IA industry starting in the second quarter of last year has hit the bottom, with evidence including a continued improvement in orders received by the Japan Machine Tool Builders’ Association and Japanese machinery components maker THK Co’s forecast of order recovery in the second quarter,” Chuang and Liu said.

Electronic components and devices inventory data from the Japanese Ministry of Economy, Trade and Industry have also improved for three consecutive months, following a full year of deterioration, providing an indication that IA demand is in recovery, they said.

Taiwanese makers started to postpone shipments of industrial automation components last quarter, but industry-wide checks by KGI found that their inventories have dropped to reasonable levels, the analysts said, adding that companies might soon have to replenish inventory in response to a better order outlook.

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