THI Global Holdings Corp (台驊國際投資控股), a Taiwanese freight-forwarder and logistics firm, is targeting increased long-term profitability in its trade logistics business by raising revenue to 20 percent from 15 percent within the next few years.
Following rising demand from China, the company aims to set up more warehouse bases in Shanghai, Shenzhen and other southern Chinese cities in the second half of this year.
“Compared with the freight-forwarding business, the trade logistics sector and logistics management business offer a higher gross margin,” THI spokeswoman Echo Wan (萬心寧) told a conference of investors yesterday.
The average gross margin of the traditional freight-forwarding business stands at between 12 percent and 16 percent, with trade logistics exhibiting a gross margin of about 30 percent, THI statistics showed.
Wan remained optimistic about the company’s business this quarter — the traditional peak period for the industry — saying net income generated last month has already reached half of the level recorded in the first half of this year.
THI saw net profits total NT$47.11 million (US$1.57 million), or NT$0.66 per share, in the first six months of the year, showing a significant improvement from NT$2.16 million, or NT$0.03 per share, recorded a year earlier, its stock exchange filing data showed.
In the April-to-June period, net income stood at NT$43.67 million, or NT$0.61 per share, doubling from the level of NT$20.76 million, or NT$0.29 per share, posted during the same period last year.
Despite sales showing a 4.3 percent year-on-year decline in the second quarter, THI’s strategy to choose customers more carefully helped improve gross margin to 16.8 percent, up from 14.3 percent recorded a year ago, company statistics showed.