Capital Investment Management Corp (群益投顧) retained its “neutral” rating on Merida Industry Co (美利達), as macroeconomic factors dampen sales in China and the global bicycle industry enters a traditional low season.
Merida’s shipments to China last year declined by 28 percent annually to 720,000 bicycles, plummeting from the 1 million bicycles it shipped to the country in 2014, Capital Investment Management said in a note to clients published on Thursday.
This year, shipments to China are forecast to fall by a further 16.6 percent annually to 600,000 units, with shipments to the EU dropping 6.6 percent annually to 620,000 units and to North America by 4 percent annually to 480,000 units, the note said.
“Fortunately, consumers still favor relatively high-end bicycles, and the company is expected to benefit from a rise in average selling prices, slightly offsetting the pressure of decelerating shipments,” the report said.
Gross margin and operating margin are expected to stay flat at 17.71 percent and 10.31 percent year-on-year respectively, the report said.
In addition, Japan’s Shimano Inc, a leading bicycle parts maker commanding 70 percent of the global market for gears, reported slowing sales and inventory growth in the third quarter of last year, the report said.
Shimano’s revenue and inventory figures — which saw a 40 percent and a 30 percent rise in the second quarter of last year respectively — both dipped to less than 10 percent in the third quarter of last year, the report said.
“As Shimano has entered into a cycle of inventory digestion, business outlook for the industry might be more sluggish this year than last year,” the note said, adding that the Japanese company’s performance is considered an indicator for the global bicycle industry.
A bicycle is made up of nearly 2,000 major and minor components, which include the raw materials that represent 90 percent of manufacturing costs, the report said.
For this year, Capital Investment Management expects Merida’s revenue to dip 4.04 percent year-on-year to NT$26.97 billion (US$801.01 million), and net income to recede 5.16 percent annually to NT$2.99 billion, or earnings per share of NT$10.01.
Merida’s net income is expected to have shrunk 5.7 percent annually to NT$3.16 billion last year, according to Capital Investment Management’s estimates.
Merida’s revenues rose 3.22 percent to NT$28.1 billion last year, according to the company’s filing with the Taiwan Stock Exchange last month.
FALLING BEHIND: Samsung shares have declined more than 20 percent this year, as the world’s largest chipmaker struggles in key markets and plays catch-up to rival SK Hynix Samsung Electronics Co is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce its global headcount by thousands of jobs, sources familiar with the situation said. The layoffs could affect about 10 percent of its workforces in those markets, although the numbers for each subsidiary might vary, said one of the sources, who asked not to be named because the matter is private. Job cuts are planned for other overseas subsidiaries and could reach 10 percent in certain markets, the source said. The South Korean company has about 147,000 in staff overseas, more than half
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
An Indian factory producing iPhone components resumed work yesterday after a fire that halted production — the third blaze to disrupt Apple Inc’s local supply chain since the start of last year. Local industrial behemoth Tata Group’s plant in Tamil Nadu, which was shut down by the unexplained fire on Saturday, is a key linchpin of Apple’s nascent supply chain in the country. A spokesperson for subsidiary Tata Electronics Pvt yesterday said that the company would restart work in “many areas of the facility today.” “We’ve been working diligently since Saturday to support our team and to identify the cause of the fire,”
Sales RecORD: Hon Hai’s consolidated sales rose by about 20 percent last quarter, while Largan, another Apple supplier, saw quarterly sales increase by 17 percent IPhone assembler Hon Hai Precision Industry Co (鴻海精密) on Saturday reported its highest-ever quarterly sales for the third quarter on the back of solid global demand for artificial intelligence (AI) servers. Hon Hai, also known as Foxconn Technology Group (富士康科技集團) globally, said it posted NT$1.85 trillion (US$57.93 billion) in consolidated sales in the July-to-September quarter, up 19.46 percent from the previous quarter and up 20.15 percent from a year earlier. The figure beat the previous third-quarter high of NT$1.74 trillion recorded in 2022, company data showed. Due to rising demand for AI, Hon Hai said its cloud and networking division enjoyed strong sales
RSS