Hiwin expects improved sales in second half

PICKUP::Rising sales at its China distributors should allow the precision parts manufacturer to collect on overdue accounts and lift revenues, an official said

By Camaron Kao  /  Staff reporter, with CNA

Sat, Jun 29, 2013 - Page 13

Hiwin Technologies Corp (上銀科技), a precision machine component manufacturer, expects sales in the second half of the year to rise to the same level as last year, as its Chinese distributors resolve their inventory problems, a company official said at the annual general meeting yesterday.

“Sales this month improved significantly from a month ago and could reach NT$1 billion [US$33.2 million],” Hiwin chairman and CEO Eric Chuo (卓永財) said. “We believe sales will improve month-on-month in the second half of the year.”

Chuo said Hiwin’s sales would be sustained by the demand for 3D printing and outer space equipment, as well as the automation trend among Chinese notebook producers.

From January through last month, the company’s revenue fell 20.14 percent to NT$4.11 billion from NT$5.15 billion a year ago.

Net profit in the first quarter also plummeted 180 percent to NT$199.01 million from NT$558.55 million a year ago, as the company booked a reserve of NT$180 million for overdue accounts receivable in China.

However, as the company’s Chinese distributors report rising sales and their inventory levels decline, Hiwin can collect tens of millions of US dollars from these accounts, Chuo said.

HSBC Securities Taiwan forecast that Hiwin’s sales would rebound later this year, pushing its annual revenue to NT$11.5 billion. That will still be lower than the company’s revenue of NT$12.37 billion last year, company data showed.

Hiwin’s sales growth will also be slower than the industry average because inventory clearance at its Chinese distributors is taking longer than expected, HSBC said in a note on Tuesday last week.

Hiwin yesterday secured shareholders’ approval to distribute a cash dividend of NT$2.70, which translates into a dividend yield of 1.5 percent, and a stock dividend of 3 percent, based on last year’s earnings of NT$2 billion, or NT$8.13 per share.

That was lower than a cash dividend of NT$5.50 and a stock dividend of 5 percent a year ago, but was close to a cash dividend of NT$3 and a stock dividend of 3 percent in 2011.

Chuo said the company was distributing lower dividends this year to support its expansion plans.

The company plans to acquire a plot of land in Houli District (后里), Greater Taichung, for capacity expansion by 2017, but did not provide an investment figure.

Hiwin’s shares declined 0.56 percent to NT$179 yesterday, underperforming the TAIEX, which was up 2.26 percent, Taiwan Stock Exchange data showed.