Footwear supplier Pou Chen Corp (寶成工業) on Tuesday last week reported that net income in the first half of the year increased 13.6 percent from the same period last year, due mainly to non-operating gains.
Net income attributable to the parent company totaled NT$4.87 billion (US$158.1 million) in the first six months, up from NT$4.29 billion a year earlier thanks to non-operating gains of NT$3.01 billion, especially NT$2.44 billion in income derived from Nan Shan Life Insurance Co’s (南山人壽) equity and bond investments, Pou Chen said in a statement.
Pou Chen, the world’s largest manufacturer of branded athletic and casual footwear, holds a 18.13 percent stake in Nan Shan. Apart from Nan Shan, the company has investments ranging from shoe manufacturing to footwear retailing, and from electronics to banking and land development.
The capital gains from Nan Shan were NT$1.85 billion higher than a year earlier and helped Pou Chen offset the decline in operating income, which was due to order fluctuations in contract manufacturing and a drive to upgrade its retail business, Pou Chen said.
Pou Chen has been pushing for business transformation to cope with the fast-changing market dynamics. In the first half of the year, its retail business accounted for 40.6 percent of the company’s sales, up from 32.7 percent in the same period last year, while shoe manufacturing comprised about 59.1 percent, sliding from 66.9 percent a year earlier.
Overall sales increased 3.4 percent year-on-year to NT$141.42 billion from NT$136.82 billion a year earlier, company data showed.
Pou Chen said its operating income decreased 24.8 percent year-on-year to NT$6.32 billion in the six-month period, with operating margin falling from 6.1 percent to 4.5 percent.
Gross margin declined from 25.9 percent to 25.5 percent in the period, it said.
In the first half, earnings per share were NT$1.65, up from NT$1.45 a year earlier, it said.
For the second half of the year, Pou Chen’s manufacturing subsidiary, Yue Yuen Industrial (Holdings) Ltd (裕元工業), might continue to see a business downtrend, while its retail business, Pou Sheng International Ltd (寶勝國際), could see gross margin remain under pressure amid rising competition from online shopping in China, Yuanta Securities Investment Consulting Co (元大投顧) analyst Peggy Shih (施姵帆) said in a client note.
RESTRUCTURING: Taichung and Taoyuan profited most from local firms moving back high-end manufacturing amid the US-China decoupling of trade ties, the ministry said The government’s “Invest in Taiwan” initiative might this year see NT$627.1 billion (US$21.7 billion) of investment pledges realized, with several firms raising stakes and two dropouts due to customer losses, Minister of Economic Affairs (MOEA) Wang Mei-hua (王美花) said yesterday. Wang made the statement at the monthly meeting of the Third Wednesday Club, a local trade group featuring the top 100 firms of each business sector. Since early last year, the government has launched three programs intended to help local companies grapple with US-China trade rows and the COVID-19 pandemic, mainly through moving production lines back to Taiwan. Thus far, the ministry
JOBS AT RISK? Most Cathay Dragon routes are to be operated by Cathay Pacific or a subsidiary, but it was unclear how Taiwanese workers would be affected Cathay Pacific Airways Ltd (國泰航空) yesterday said it is planning new flight services for Taiwan as it announced a corporate restructuring that included the shutdown of its regional subsidiary, Cathay Dragon (國泰港龍), and could lead to job cuts in Taiwan. Cathay Pacific said the shutdown means that the one round-trip service between Taichung and Hong Kong per day and seven round-trip services between Kaohsiung and Hong Kong operated by Cathay Dragon prior to the COVID-19 pandemic would be terminated. “The parent company is planning a new schedule between Taiwan and Hong Kong,” Cathay Pacific assistant manager for corporate communications Moses Hou (侯恩錫)
OVERHEATED MARKET?: The gauge would be designed to provide more reliable information than private-sector data, and help improve policymaking, the council said The National Development Council (NDC) is considering creating a business climate index on Taiwan’s property market, allowing policymakers to better monitor market movements and intervene if necessary, NDC Minister Kung Ming-hsin (龔明鑫) said yesterday. Kung made the remarks at a meeting of the legislature’s Economic Committee where lawmakers from across party lines voiced concerns about housing price hikes driven by capital repatriation. Kung said that the council is assessing the possibility of creating an index designed to provide more accountable and transparent information than data provided by private-sector market analysts, and could help improve policymaking. The council would compile a report on
STOCK MARKETS TAIEX closes slightly higher The TAIEX closed slightly higher yesterday as market sentiment remained cautious over the Nov. 3 US presidential election. Contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) was again the anchor stabilizing the broader market, preventing the main board from falling into negative territory at the end of the session, dealers said. The TAIEX closed up 14.88 points, or 0.12 percent, at 12,877.25, on turnover of NT$167.982 billion (US$5.81 billion). TSMC, the most heavily weighted stock on the local market, rose 0.44 percent after fluctuating between NT$451 and NT$456. The semiconductor subindex and the bellwether electronics sector