Leading down jacket and garment manufacturer Quang Viet Enterprise Co (廣越企業) expects to nearly double its first-quarter revenue to NT$20 billion (US$648.8 million), from NT$11.62 billion a year earlier, thanks to additional orders from major brand customers, a company executive said on Wednesday.
“The driving momentum is mainly from more orders from Adidas AG, Patagonia, The North Face and Nike Inc, in addition to an increase in the average selling prices of our products,” Quang Viet president Charles Wu (吳朝筆) said at an earnings conference in Taipei.
Orders from Adidas and Patagonia, the company’s top two customers, are estimated to increase 30 percent year-on-year, as Adidas expands its outerwear market in China and Patagonia focuses more on high-end products in Europe, North America and Japan, Wu said.
Shipments to Nike Inc and Puma are expected to increase 10 percent thanks to a rebound in the US market after a winter of extreme weather last year, he said.
First-quarter sales are expected to contribute 13 percent of total sales this year, the company said, adding that second and third-quarter sales should contribute 66 percent, while fourth-quarter sales should make up 21 percent.
Average selling prices could increase by about 3 percent this year due to the rising minimum wage in Vietnam and China, and the soaring cost of duck and goose feathers, the company added.
Quang Viet’s net profit increased about 47 percent year-on-year to NT$769 million last year, with earnings per share of NT$7.43.
The company said it would post losses in the first quarter, as garment companies tend to buy the entire year’s materials at the beginning of the year, thus increasing that quarter’s expenses, while customers tend to purchase clothing in winter.
The company expects to keep production costs stable this year, despite expenses resulting from its acquisition of King Hamm Industrial Co (金漢實業) and a knitted fabrics business in late 2017, Wu said.
Quang Viet has operations in Taiwan, China, Vietnam, Romania and Jordan.
Last year, the company added 449 production lines to satisfy growing customer demand, it said, adding that it plans to add 38 production lines this year and another 50 next year.
Lingering US-China trade tensions have had a limited effect on the company, Wu said.
The company’s operations in China mainly handle local demand, he added.
The company’s outlook on its operations in Vietnam are especially rosy thanks to free-trade agreements between Vietnam and Japan, and South Korea and Russia, he said, adding that the EU this year decided not to impose tariffs on goods from Vietnam.
Quang Viet’s operations in Romania seek to supply high-end down products to Europe, he said.
Earlier last month, Quang Viet acquired a 24.34 percent stake in China’s Anhui Xingxing Garments Co (安徽星星服裝) to broaden its client base, the company said.
The Chinese firm makes down jackets and fabric clothing, it said, adding that top customers include Decathlon SA, Anta Sports Products Ltd (安踏體育用品) and Fila Inc.
“I love setting up factories, so I am always on business trips. I’ve been involved in the garment industry my whole life and I plan on doing it right up until the end,” Wu said.
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