TCI Co Ltd (大江生醫), which manufactures health food, functional beverages and skincare products, yesterday said it has signed a contract with a subsidiary of Japan-based drink maker DyDo Drinco Inc to acquire its knowhow on making new functional drinks.
TCI expects to sell 5 million to 10 million bottles of the new drink in Taiwan and China a year, accounting for 10 percent of the company’s annual revenue.
The Japanese company will transfer knowledge on its best selling products to TCI for a fee, the Taiwanese firm said, without elaborating.
TCI plans to launch the new drink in Taiwan by the end of the year and start selling the product in China after its new drinks factory in Shanghai is operational at the end of this year, it said.
Sales of functional drinks accounted for 54 percent of TCI’s revenue of NT$1.4 billion (US$46.82 million) last year, while sales of facial masks accounted for 7 percent, according to the company.
The company also held its annual shareholders’ meeting yesterday, when shareholders approved the company’s plan to pay a cash dividend of NT$1 and stock dividend of 15 percent, based on earning per share of NT$3.51, or NT$143.84 million last year.
However, in the first quarter, the company reported a revenue decline of 91.68 percent to NT$3.61 million, or earnings per share of NT$0.08, down from NT$43.39 million, or earnings per share of 0.92, the previous year, a company filing to the Taiwan Stock Exchange showed.
Jih Sun Securities Investment Consulting Co (日盛投顧) said the profit decline was because of new import restrictions implemented in China this year and high depreciation costs at its new facial mask plant in Shanghai, which started operation in January, according to a report issued on April 17.
Jih Sun analyst Dirk Yeh (葉揚甲) forecast TCI’s revenue would rise to NT$1.68 billion this year, while its profit would grow to NT$173 million, or earnings per share of NT$3.95, on the back of rising sales of its functional drinks in China, Thailand, Malaysia and India.
TCI’s drinks developed in conjunction with DyDo Drinco’s subsidiary are not expected to affect revenue until next year, Yeh said.
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