Bicycle maker Merida Industry Co (美利達) said that its growth momentum in the second half of this year would continue to be driven by electric bicycles, with shipment growth likely to continue into next year.
“Our production lines for electric bikes ran at full capacity in the first half and they are expected to remain fully loaded through the first quarter of next year,” a public relations official said by telephone on Tuesday. “As inventories are still low, there will be no low seasons for electric bikes this year.”
The official’s remark came as the company reported robust electric bicycle sales in Europe and the US in the first six months of the year, reaching about 116,000 units, or 18.86 percent of the company’s total bicycle shipments.
As it continued working to solve its component supply constraints, growth in electric bicycles shipments continued last month, hitting a record-high 22,113 units and accounting for 19.49 percent of total shipments, Merida said.
With increasing shipments of electric bikes, which have higher average selling prices and profit margins, coupled with bicycle shipments returning to positive growth in China and contribution from overseas subsidiaries, Merida reported a 90.28 percent increase in net income to NT$1.05 billion (US$33.48 million) in the first half.
Earnings per share climbed from NT$1.84 to NT$3.5, while gross margin increased 1.31 percentage points to 13.33 percent and operating margin advanced 1.2 percentage points to 5.82 percent, company data showed.
Yuanta Securities Investment Consulting Co (元大投顧) analyst Peggy Shih (施姵帆) said in a note on Tuesday that Merida’s bicycle shipments to China bottoming out last year bodes well for the company.
“Merida’s China bike shipments finally returned to positive growth of 6 percent year-on-year in the first half after consecutive annual declines in each quarter since 2017 due to bike-sharing,” Shih said.
China shipments are forecast to rise 10 percent this year, she said.
Strong electric bicycle sales also drove Giant Manufacturing Co’s (巨大機械) net income in the first six months up 60.1 percent annually to NT$1.72 billion, or earnings per share of NT$4.59.
Gross margin improved 2.01 percentage points to 21.13 percent and operating margin rose 1.77 percentage points to 7.6 percent, Giant said.
The company said that it sold 290,000 electric bikes in the first six months, up 57 percent from a year earlier, mainly driven by a more than 40 percent sales increase in Europe, as well as steady expansion in the US and Chinese markets.
In addition to electric bikes, this year's launch of a new high-end bike component brand, Cadex, would be another strong growth driver next year, Shih said.
Cadex mainly provides high-priced carbon fiber wheels, tires and saddles, which are scheduled to hit the market next month, according to Giant.
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