Precision machine maker Global Tek Fabrication Co Ltd (時碩工業) expects orders for its auto parts business to return to normal in the second half of this year in light of rising demand for energy-efficient products, after a weak Chinese auto market affected business in the first half.
“As clients deplete their inventories and introduce more vehicles to conform to China’s new emission standards, orders have shown growth since last month compared with the first half of the year,” the company said in a news release on Wednesday last week.
While sales of auto parts for power trains and safety systems fell to account for 58 percent of total sales in the first half, those for components used in the oil refining, wafer and bicycle industries grew to contribute 27 percent to sales, while aviation components took the remaining 15 percent, the company said.
As the company is diversifying its product portfolio, the industrial and aviation business would remain the primary driver of momentum in the second half, it said.
Earlier this month, the company’s board of directors approved a plan to issue NT$600 million (US$19.11 million) in convertible bonds as Global Tek aims to raise new capital by the end of this quarter to repay bank loans and increase working capital.
It also plans to invest 150 million yuan (US$21.25 million) to build a new plant in Wuxi, Jiangsu Province, over the next three years, it said.
Second-quarter net income fell 9.35 percent annually to NT$69.97 million, with earnings per share (EPS) declining from NT$1.17 to NT$1.05, the company reported.
That led to net income dipping 11.7 percent year-on-year to NT$120.63 million in the first half of the year, with EPS dropping from NT$2.13 to NT$1.82, mainly due to declining non-operating income, while revenue climbed 7.57 percent to NT$1.87 billion, company data showed.
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