Tue, May 21, 2019 - Page 11 News List

Rexon bullish on sales of home fitness bicycles

MAJOR CLIENT:Rexon Industrial Corp Ltd is the leading supplier of exercise bikes to a US sports brand and the only supplier of treadmills for the US firm

By Kwan Shin-han  /  Staff reporter

Rexon Industrial Corp Ltd (力山工業), a maker of fitness equipment and power tools, said its shipments of home fitness bikes are expected to rise each quarter this year as a major US client continues to expand its business in Britain and Canada.

The Taichung-based company also forecast that shipments of treadmills would grow in the second half of the year as the company enters the peak season and factory utilization increases on higher automation and better efficiency.

An analyst at a local brokerage, who asked not to be named, said that Rexon's orders of fitness equipment and new products from one of its major US customers have increased so far this year, compared with last year.

“Rexon is the largest supplier of exercise bikes and the only supplier of treadmills to its major US client,” the analyst said.

“The company's shipments of woodworking machines are also expected to increase this year as demand in the US market continues to grow,” he said.

The firm has 14 production lines for woodworking machine in its factory in Tongxiang, China.

In light of higher US tariffs imposed on Chinese goods, major woodworking machine manufacturers have been looking for other production bases since July last year, the analyst said.

To cope with orders diverted from China, the company this quarter has added four production lines at its factory in Taichung’s Dali District (大里) for making woodworking machines and another 15 production lines for fitness equipment, he said.

Rexon shares fell 0.51 percent to close at NT$77.6 in Taipei trading yesterday.

The shares have risen 5.01 percent since May 9 after investors were impressed by the company’s first-quarter performance and a growing contribution from the US market.

First-quarter net income grew 58.57 percent year-on-year to NT$827.69 million (US$26.37 million), from NT$13.89 million the previous year, or earnings per share of NT$4.56, thanks to asset sales at its factory in Hangzhou, China, the company said.

Without the asset disposal gains, earnings per share were NT$0.63, compared with NT$0.08 the previous year and NT$1.35 the previous quarter.

Rexon sold the Hangzhou factory for NT$831.4 million, a disposal gain of about NT$707.94 million, it said.

Gross margin increased 3.23 percentage points to 18.93 percent, while revenue rose 101.38 percent to NT$2.04 billion from NT$1.01 billion the previous year.

Fitness equipment contributed 61 percent of revenue last year, power tools made up 35 percent, while automotive plows accounted for 4 percent, company data showed.

This story has been corrected since it was first published.

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