Leading automotive lighting module maker Laster Tech Co Ltd (麗清科技) yesterday provided a mixed outlook for this year, after a sluggish Chinese auto market, rising nonoperating expenditures for new factories and a recapitalization scheme lowered its first-quarter earnings.
“This quarter could be the bottom if there are no signs of recovery from China’s auto market or a stimulus package from the Chinese government,” a Laster Tech official told the Taipei Times by telephone on condition of anonymity.
US-China trade tensions have clouded the Chinese auto market, which has seen signs of weak demand since April last year, making local automakers more conservative about production expansion, the official said.
Laster Tech makes automotive lighting modules for Chinese auto parts companies, and its traditional and LED lighting products are used by Shanghai Volkswagen Co Ltd (上汽大眾), SAIC-General Motors Corp Ltd (上汽通用汽車), Geely Automobile Holdings Ltd (吉利汽車), Great Wall Motor Co (長城汽車) and other major automakers.
“Although our sales dropped last quarter, we tried to make up the decline by raising the penetration rate of our products in China to more than 60 percent [compared with 59 percent last year], as demand for our LED lights and daytime running lights grows,” the official said.
Module orders from Huayu Vision Technology (Shanghai) Co Ltd (華域視覺科技), a leading automotive light maker in China, also climbed last quarter, the official said.
Laster has aimed to further diversify its customer base to boost revenue growth and avoid sales growth fluctuation, while lifting its sales contribution from the headlight business and improving its product mix for better gross margin.
LED taillights remained the largest revenue source last quarter, accounting for 50 percent of total revenue, while daytime running lights and headlight modules contributed 32 percent and 8 percent respectively, with other lighting modules making up the remaining 10 percent, company data showed.
Sales contribution from LED headlights this year is expected to climb to more than 10 percent, compared with 7 percent last year, the official said.
The company expects ample room for growth, as its LED headlights have secured a less than 10 percent market share in China, they said.
Laster’s new factories in Wuhan and Shanghai, which are to start operations next month, are expected to increase the company’s capacity by more than 30 percent, they added.
First-quarter net profit dipped 51.3 percent year-on-year from NT$54.31 million to NT$26.45 million (US$1.74 million to US$848,708), hurt by rising nonoperating expenditures including rental expenses for new factories, company data showed.
Earnings per share were diluted from NT$0.80 to NT$0.38 over the period, the data showed, as the company in March increased its paid-in capital by NT$217.5 million to NT$757.84 million by issuing 7.5 million new shares.
Gross margin decreased 2.19 percentage points to 16.19 percent, while revenue fell 7.2 percent to NT$983.6 million, compared with NT1.06 billion a year earlier, the data showed.
Laster shares yesterday closed down 2.86 percent at NT$35.65 in Taipei trading. They have risen 2.44 percent this year.
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