Precision gear maker Khgears International Ltd (鈞興) on Wednesday last week said it would set up a plant in Taiwan this year to focus mainly on harmonic gear drives, as it aims to meet rising demand from the electric bike and industrial robot sectors.
The firm, incorporated in the Cayman Islands, said that it intends to make Taiwan its second major production base after China, but higher land costs in industrial zones and difficulty in recruiting workers for night shifts mean that it needs more time to consider relocating production.
Still, the company plans to construct another plant and build a research and development center in the next two years, it said.
In China, Khgears is building two plants in Zhuhai in China’s Guangdong Province for 15 million yuan (US$2.14 million), which are expected to be completed before September next year.
The plants would produce gears for industrial robots and alternative-fuel vehicles, as well as harmonic gear drives and other high-end smart transmission gears, the firm told a pre-listing conference in Taipei.
Khgears plans to debut its shares on the Taiwan Stock Exchange later next month, with an initial public offering price (IPO) of about NT$70.
The firm is to become the first foreign-registered company to conduct an IPO on the local main bourse this year.
Khgears, established in January 2003, is the world’s largest supplier of high-end small and medium bevel gears.
Bevel gears, the gears where two shafts intersect, remained the company’s main product last year, accounting for 38 percent of total sales, it said, adding that other products include straight gears, powder metallurgical gears and gearboxes.
The company’s clients are mostly first-tier vendors in the fields of electric and garden tools, industrial robots and automobiles, Khgears president and spokesman David Du (杜春輝) said at the conference.
Khgears said that net income for the first half of this year jumped 39.46 percent annually to NT$116.43 million (US$3.71 million), or earnings per share of NT$2.77, while revenue increased 5.89 percent to NT$801.97 million.
The company’s revenue is expected to grow 5 to 10 percent this year, from last year’s NT$1.57 billion, analysts said.
Its full-year revenue split is likely to be 45-55 for the first and second halves, because the July-to-September period is the peak season for electric tools, boosting second-half sales, they said.
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