Wire harness maker BizLink Holding Inc (貿聯控股) could report double-digit percentage revenue growth next year, catalyzed by a major electric-vehicle client’s shipment expansion, Capital Investment Management Corp (群益投顧) said in a note to clients.
However, as the company might continue adjusting capacity and relocating production lines for information technology wire harnesses in response to clients’ needs, its earnings growth for next year is likely to be capped, Capital Investment said on Friday.
BizLink is the sole supplier of wiring harnesses for battery management systems in Tesla Inc’s Model 3 sedans. The company also provides docking stations and dongles to IT brand vendors, with docking stations accounting for 75 to 80 percent of the company’s IT revenue in the third quarter.
BizLink’s revenue growth from docking stations decelerated in the third quarter as IT clients turned conservative and slowed order pull-in on concerns about the US-China trade dispute’s effect on tariffs, Capital Investment said.
BizLink has production bases in China, Malaysia, Mexico, Serbia, Slovakia and the US. To meet its IT clients’ need to avoid additional US tariffs on IT products, the company has relocated 40 percent of its docking station capacity in China to Taiwan and more than 20 percent of dongle capacity in China to Malaysia.
“However, IT clients have slowed their new product plans on the tariff impact... The end market’s weaker-than-expected demand may still weaken BizLink’s IT sales momentum,” Capital Investment analyst Ivy Wang said in the note.
“Given concerns over the labor shortage in Taiwan, Bizlink plans to relocate some docking station production lines from Taiwan to Malaysia afterward,” she said. “Although Bizlink may pass the additional costs to IT clients, other expenses related to allocation are expected to impact the company’s operating margin.”
BizLink reported earnings per share of NT$11.46 in the first three quarters of this year, up from NT$8.02 in the same period last year. Gross margin and operating margin also improved to 23.76 percent and 9.7 percent in the first three quarters respectively, from 21.07 percent and 7.92 percent.
On Thursday, BizLink reported revenue of NT$1.89 billion (US$61.97 million) for last month, a decrease of 2.58 percent from a year earlier, which the company attributed to slowing shipments ahead of the year’s end.
“Shipments in the industrial segment rose, while those in the IT segment slowed and those in the remaining segments were flat,” BizLink said in a statement.
In the first 11 months, cumulative revenue totaled NT$21.26 billion, up 9.26 percent from a year earlier, it said.
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