Sensor maker to integrate radar systems subsidiary

By Chen Cheng-hui  /  Staff reporter

Mon, Jan 28, 2019 - Page 15

Cub Elecparts Inc (為升), which makes electric switches and electric sensors for cars, plans to purchase the 43.11 percent of shares it does not own in unlisted subsidiary CubTek Inc (為昇科) in a bid to integrate the group’s research and manufacturing resources, and increase economies of scale through a larger product portfolio.

The Changhua County-based firm plans to acquire all of CubTek, which is based in Hsinchu County, after its board of directors approved a share-swap deal, the company said in a Taiwan Stock Exchange filing last week.

In the filing, Cub Elecparts said it plans to issue 5.52 million new shares to exchange for the remaining 27.59 million CubTek shares, with the share swap ratio set at one Cub Elecparts share for five CubTek shares.

The firms hope to complete the deal by May 31 after gaining approval from the authorities and expect that integration will allow them to seize emerging opportunities in the millimeter-wave radar market, the filing said.

Cub Elecparts, which focuses on the aftermarket automotive switch and sensor sector, has held a leading position in the segment of tire-pressure monitoring systems and tapped the millimeter-wave radar and advanced driver-assistance systems market in recent years.

The company reported a net income of NT$840.1 million (US$27.25 million) in the first three quarters of last year, up 10.56 percent from January to September 2017, with earnings per share of NT$7.33.

Consolidated revenue increased 14.68 percent to NT$4.04 billion last year, company data showed.

CubTek, established in 2016, has developed proprietary technologies for millimeter-wave radar that operates in the 24 gigahertz (GHz) and 77GHz frequency bands.

The firm’s antenna system, radar algorithm and power circuit designs are used in various applications for vehicle blind spot detection, anti-collision warning, lane change assistance and cross traffic alert systems, its Web site says.

Jih Sun Securities Investment Consulting Co (日盛投顧) said that CubTek could be a drag on Cub Elecparts' profit in the short term, as CubTek remains loss-making, with a negative profit of NT$93 million in the first three quarters of last year.

Cub Elecparts would also see its earnings per share diluted as its capitalization would expand from NT$1.15 billion to NT$1.2 billion after the deal, Jih Sun said in a client note on Tuesday.