Turvo International Co (宇隆科技) yesterday said sales momentum would likely carry into the second half of the year, thanks to increasing orders from major clients.
Revenue in the first five months of this year dropped 9.41 percent annually to NT$1.02 billion (US$32.36 million) due to a sluggish Chinese auto market amid the US-China trade dispute, the company said.
“As Beijing strengthens environmental protection laws this year, demand for new trucks with lower emissions is expected to grow, which would lead to higher sales of our auto components,” Turvo chairman Tony Liu (劉俊昌) told a shareholders’ meeting in Taipei.
The company said orders from China’s United Automotive Electronic Systems Co (聯合汽車) are expected to increase to NT$30 million this year and Germany’s Bosch Group is expected to source more than NT$50 million of injectors used in smart and diesel engines from the second half.
Bosch used to buy gasoline direct-injection systems, common rail diesel-injection systems and high-pressure pumpers from the company, Turvo said.
US-based BorgWarner Inc is also expected to add NT$50 million to NT$80 million to the company’s sales this year on higher orders for variable valve timing components, used to alter the timing of a valve lift event and improve engine efficiency, it said.
Auto parts contributed 74 percent to the company’s sales last year, while medical equipment and other industrial application components accounted for 9 percent and 17 percent respectively, company data showed.
Increasing shipments of medical equipment to vendors, such as Smiths Medical Inc, Zimmer Biomet Holdings Inc, Johnson & Johnson Co, would also boost Turvo’s sales and lead to a better second half, compared with the first half, analysts said.
At the meeting, machine tools maker Goodway Machine Corp (程泰機械) chairman Edward Yang (楊德華) was elected as a director, with his term to en on June 16, 2022, as the two firms forge an alliance to jointly develop new products and improve production efficiency.
Liu, who was elected a Goodway director on Friday, said Turvo this year started buying equipment from Goodway, instead of German and Japanese companies.
Shareholders yesterday approved Turvo’s plan to distribute a cash dividend of NT$4, implying a payout ratio of 59.08 percent based on last year’s earnings per share of NT6.77, and a dividend yield of 5.71 percent based on the stock’s closing price of NT$70.1 yesterday.
In the first quarter, the company reported that net income climbed 35.33 percent annually to NT$102.82 million, with earnings per share of NT$1.71.
However, gross margin fell by 4.3 percentage points to 35.43 percent.
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