Tong Yang Industry Co (東陽實業), which supplies automotive metal sheets and bumpers to global brands, yesterday said that pre-tax profit last month increased 1 percent annually to a record NT$206 million (US$6.59 million).
Aggregate pre-tax income in the first seven months of the year surged 85 percent to NT$1.7 billion, or earnings per share of NT$2.75, which was also a record figure, company data showed.
The company attributed the earnings increase to robust demand from China, after a cut in the purchase tax stimulated vehicle sales.
“A 50 percent cut in the purchase tax for small-engine cars boosted Chinese automobile sales, which helped stimulate our sales,” Tong Yang’s investor relations official said by telephone.
China had a 10 percent purchase tax on cars before it was halved.
The auto parts manufacturer is optimistic about its outlook for the rest of the year, aided by its capacity expansion and a seasonal pick-up.
“The company’s Tainan plant, which will focus on high value-added products, is to begin operations in the fourth quarter. It will produce 3.12 million units of electronic plating components a year,” the official said.
Tong Yang is planning to build a new plant in Qingdao in China’s Shandong Province in the second half of the year, hoping to commence operations in 2018, the official said.
Demand from the vehicle aftermarket is expected to rise, especially during the fourth quarter high season, the official added.
Last month, Tong Yang said that it had obtained certification for its post-sales car parts from China’s second-largest property insurance company, Ping An Insurance (Group) Co (平安產險), which should help it obtain orders from insurance companies.
Tong Yang’s earnings should further improve, supported by solid demand for its aftermarket and original equipment manufacturing products, Daiwa Capital Markets Inc analyst Helen Chien (簡君穎) said in a report on Monday.
Chien expects Tong Yang’s net profit to rise 21.4 percent annually this quarter from last quarter’s NT$514 million and net income for the full year to surge 43.3 percent this year from last year’s NT$1.7 billion.
Tong Yang’s first-half net profit more than doubled to NT$1.13 billion from NT$542 million a year ago, company data showed.
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