Mon, Sep 02, 2019 - Page 15 News List

TYC cautious over China auto market

LOOKING ELSEWHERE:The lighting products maker said OEM business in Europe and North America would offset a decline in China brought on by trade tensions

By Kwan Shin-han  /  Staff reporter

Automotive lighting products manufacturer TYC Brother Industrial Co (堤維西) on Wednesday last week maintained a cautious outlook for the Chinese vehicle market in the second half of the year, saying it would slow expansion at its plant in Jiangsu’s Kunshan as the US-China trade dispute lingers.

The company, which supplies its products for global brands via original equipment manufacturing (OEM) or the aftermarket channel, said it expects increased aftermarket business in Europe and North America would help offset the decline in OEM business in China.

Aftermarket business accounted for more than 80 percent of the company’s revenue of NT$8.94 billion (US$284.62 million) in the first half, up 8.8 percent year-on-year.

With better performance in aftermarket business, TYC reported that net income climbed 15.63 percent annually and 17.57 percent quarterly to NT$246.81 million last quarter, or earnings per share of NT$0.79 and gross margin of 22.5 percent.

However, the company’s Varroc TYC Auto Lamps Co (大茂偉瑞柯) joint venture with Varroc Group of India had a net loss in the first half of about 1 million yuan (US$140,287), vice president and spokesperson Alex Weng (翁一峰) said.

Varroc TYC runs plants in Jiangsu’s Changzhou and Sichuan’s Chongqing that make OEM products for Ford Motor Co, Changan Automobile Group Co (長安汽車) and Jaguar Land Rover Automotive PLC.

Separately, Global PMX Co (智伸科) expects shipments of its automotive power and engine products to continue to rise in the second half of the year as demand from major clients for gasoline direct injection (GDI) and transmission products climbs, Global PMX spokeswoman Maggie Lin (林慈青) said on Wednesday.

GDI products, which accounted for 20 percent of the company’s total sales in the first half, would remain a major revenue source over the next three to five years as more vehicles, especially electric cars, adopt more energy-efficient power and engine systems, Lin said.

Increasing shipments of GDI products would help offset slowing sales of safety systems, dual-clutch transmission products and traditional port fuel injection devices in China this year, while the medical and electronic components business would see revenue grow 10 percent annually this year, the company said.

Global PMX counts Delphi Corp, Continental AG and BorgWarner Inc among its major clients. Auto parts contributed 74.43 percent of its sales in the first half, while medical components and vehicle electronics made up 23.91 percent, company data showed.

Meanwhile, aftermarket brake assemblies supplier Yusin Holding Corp (永新) plans to move part of its production line for brake pads from China to Malaysia if the US-China trade dispute worsens, as the company’s China-made products face 25 percent tariffs in the US, Yusin chairman Denni Chi (紀經得) said on Tuesday last week.

Net income surged 58.51 percent annually to NT$99.46 million in the first half, or EPS of NT$2.87. Gross margin was 32.16 percent, while revenue increased 17.45 percent to NT$804.76 million, company data showed.

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