Shares of St Shine Optical Co Ltd (精華光學), a contact lens contract manufacturing and brand vendor, have outperformed the over-the-counter benchmark by 44 percent this year on confidence about the company’s future.
In Friday trading on the Taipei Exchange, St Shine shares closed at NT$975, after moving above NT$1,000 twice last week.
The stock has increased 61.79 percent so far this year, compared with the Taipei Exchange’s 17.64 percent rise.
Founded in 1986, the New Taipei City-based company sells contact lenses under the Ticon (帝康) brand in Taiwan. It also does contact lens original design and equipment manufacturing services for several clients, including Japan’s Seed Co and Hoya Corp, as well as Bausch & Lomb Inc and Hubble Contacts in the US.
The company on Tuesday last week announced a plan to spend NT$400 million (US$13.35 million) to launch eight new production lines in a bid to cope with its growing operational scale.
The lines are scheduled to start mass production in the third quarter of next year, with local media speculating they are aimed at meeting surging orders from its Japanese and US clients.
The company’s annual capacity is expected to grow more than 30 percent to 970 million units next year from this year’s 730 million units, reports said, citing sources at St Shine.
It was St Shine’s second announcement of a capacity expansion plan this year. The firm on March 23 said it would invest NT$518 million to build 12 production lines for its contact lens products.
The company has a plant each in Sijhih District (汐止) and Wudu (五堵) in New Taipei City, as well as in Keelung, according to its Web site.
Capital Investment Management Corp (群益投顧) on Wednesday said in a note that St Shine’s sales for next year appear robust, considering the new capacity and orders released by its Japanese and US clients.
The company’s combined revenue rose 0.2 percent annually to NT$5.86 billion in the first 11 months of the year, according to St Shine’s filing with the exchange.
Although St Shine expects to start putting the new production lines online from next month, the exact operational schedule for the eight lines would depend on the company’s worker recruitment, Jih Sun Securities Investment Consulting Co (日盛投顧) said in a report.
Each production line would need 45 to 50 workers, but St Shine has only hired enough employees for three new lines, Jih Sun said.
In the first three quarters of this year, St Shine saw its cumulative net profit decline 7.75 percent annually from NT$1.29 billion to NT$1.19 billion, with average gross margin dropping 2.91 percentage points year-on-year to 39.92 percent and operating margin shrinking by 3.02 percentage points to 32.64 percent, company data showed.
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