Wed, Apr 24, 2019 - Page 12 News List

TCI mulls acquisition to expand market

Bloomberg

TCI Co (大江生醫) is in talks with a health food maker about a potential acquisition this year that is aimed at diversifying its production base, the company said.

The company hopes consumers would be more interested in the products it makes if it has factories outside China and Taiwan, executive deputy general manager William Liao ( 廖偉傑) said in an interview on Wednesday last week.

TCI is a contract manufacturer of dietary supplements, health drinks and facial masks for other companies, according to its Web site.

“China will be our growth driver in the future as it is getting older and richer,” Liao said. “Our growth will benefit from China’s consumption upgrade.”

TCI might get a deal done this year if all goes well, Liao said, but declined to provide details, including the target company’s name and location, or the planned size of a deal.

TCI plans to use its own cash for the deal and has NT$4 billion (US$129.6 million) on hand, he said.

The company paid US$29 million in October last year for a minority stake in Shanghai Baiyuete Biotechnology Co (上海百岳特), according to data compiled by Bloomberg.

The average analyst price target for TCI is NT$585.75, implying a gain of 30 percent from Monday’s close in Taipei trading, according to data compiled by Bloomberg.

That is the third-biggest upside among 104 Taiwan-listed companies with a market capitalization of more than US$1 billion and covered by at least seven analysts as of Monday.

The company has 13 buys, and no hold or sell ratings.

TCI yesterday rose 0.6 percent to close at NT$451.50, paring its drop this year to 13 percent.

The company’s first-quarter sales rose 102.6 percent year on year to NT$2.58 billion, according to an exchange statement.

The company has set an annual sales target of NT$22.2 billion by the end of 2022, Liao said.

It is aiming for sales growth of 30 percent this year, with margins of 40 to 42 percent, the company said.

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