Taiwan Paiho profit up on construction income

VOLUME BOOST::While the shoelace and elastic band maker would continue to rely on building income, certifications are to boost its core business, analysts said

By Chen Cheng-hui  /  Staff reporter

Mon, Feb 25, 2019 - Page 15

Shoelace, elastic band and fastener supplier Taiwan Paiho Ltd (台灣百和) on Tuesday reported that unaudited profit increased 10.64 percent annually last month and consolidated revenue grew 29.35 percent from January last year, driven mainly by non-operating gains.

Net income attributable to the parent company reached NT$101.24 million (US$3.28 million), up from NT$91.5 million, with earnings per share rising from NT$0.31 to NT$0.34, the company said in a regulatory filing.

Operating income rose 5.04 percent annually to NT$197.99 million, but operating margin fell 3.62 percentage points to 15.66 percent, while revenue grew from NT$977.56 million to NT$1.26 billion, thanks to the contribution from subsidiary Paiho Shih Holdings Corp’s (百和興業) construction business in China.

Net income last month reached 29.2 percent of Jih Sun Securities Investment Consulting Co’s (日盛投顧) first-quarter estimate, while earnings per share of NT$0.34 were lower than expected, it said.

“Assuming no contribution from the construction business, net income last month would be lower than the same month last year,” Jih Sun analyst Channie Wang (王章妮) said in a note on Wednesday.

Paiho would see operating margin improve moderately, a positive for earnings growth, thanks to steady construction business contribution, as well as solid shipment growth in four-way stretch products, one-piece uppers and warp-knitted jacquard mesh products, Taishin Securities Investment Advisory Co (台新投顧) said.

Meanwhile, plant certifications by a major US client for the company’s new one-piece uppers and knitted jacquard mesh products are likely to be awarded in the first and third quarter respectively, which would enable Paiho to start volume production and boost the company’s long-term competitiveness, SinoPac Securities Investment Service Corp (永豐投顧) said.

Separately, footwear supplier Feng Tay Enterprises Co (豐泰), a key supplier of Nike Inc, reported earnings per share of NT$0.87 for last month, after net profit increased 10.72 percent annually to NT$652.93 million and revenue grew 17.55 percent to NT$6.24 billion.

The company’s strong operating margin of 13.4 percent, the highest in five months, a high capacity of more than 10 million units per month and favorable exchange rates all contributed to better-than-expected results last month, JPMorgan Securities (Taiwan) Ltd said.