Garment manufacturer and down supplier Kwong Lung Enterprise Co (光隆實業) revised up its forecast for this year’s revenue growth by 5 percentage points to between 15 and 20 percent on the back of robust garment sales.
“Small to medium-sized orders for garments from new and old clients would continue to drive the sales momentum this year,” chairman and president Hebert Chan (詹賀博) told an investors’ meeting on Thursday in Taipei.
As garments offer better margins and orders remain bullish, the company will mainly produce garments in 2021, which it expects to also drive up demand for down and home textiles.
Garment profits surged 301 percent annually in the first half, accounting for a record 75 percent of total earnings, due to rising demand for outdoor and athletic wear, the company said.
However, profits from down declined 20 percent annually in the first half, accounting for 24 percent of overall profits, as prices fell from NT$66 to NT$54 (US$2.10 to US$1.72) per kilogram last quarter, special assistant and spokesman Jack Lee (李宗恆) said.
Although down prices have stopped falling this quarter, they are expected to remain low, as demand from China remains weak, he said.
Home textiles posted profits of NT$4 million last quarter, compared with net losses due to a fire a year earlier, he added.
As orders diverted from China rise because of the US-China trade dispute, the company said it would add eight production lines at its four Vietnamese garment plants in the second half, and another 10 lines next year, bringing the total to 124 lines, Lee said.
Total garment output is forecast to post double-digit growth in the following years, he said.
Thanks to rising orders and profits from its garment business, second-quarter net income surged 51.82 percent annually to NT$229.91 million.
Earnings per share improved to NT$2.04 from NT$1.41 a year earlier and NT$0.1 in the first quarter.
Garment companies usually purchase the bulk of their raw materials early in the year, resulting in lower profits in the first quarter, while shipments usually rise in the third quarter as consumers begin to buy clothing for winter, Kwong Lung said.
Gross margin improved 2.1 percentage points annually and 5.76 percentage points quarterly to 15.57 percent last quarter, as the company boosted garment shipments to ease the impact of falling down prices, it said, adding that it would continue to do so to raise gross margins.
Kwong Lung shares yesterday closed up 1.35 percent to NT$45.10 in Taipei trading.
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday received government approval to deploy its advanced 3-nanometer (3nm) process at its second fab currently under construction in Japan, the Ministry of Economic Affairs said in a news release. The ministry green-lit the plan for the facility in Kumamoto, which is scheduled to start installing equipment and come online in 2028 with a monthly production capacity of 15,000 12-inch wafers, the ministry said. The Department of Investment Review in June 2024 authorized a US$5.26 billion investment for the facility, slated to manufacture 6- to 12nm chips, significantly less advanced than 3nm process. At a meeting with
Taiwan’s food delivery market could undergo a major shift if Singapore-based Grab Holdings Ltd completes its planned acquisition of Delivery Hero SE’s Foodpanda business in Taiwan, industry experts said. Grab on Monday last week announced it would acquire Foodpanda’s Taiwan operations for US$600 million. The deal is expected to be finalized in the second half of this year, with Grab aiming to complete user migration to its platform by the first half of next year. A duopoly between Uber Eats and Foodpanda dominates Taiwan’s delivery market, a structure that has remained intact since the Fair Trade Commission (FTC) blocked Uber Technologies Inc’s
RSS