Value Valves Co Ltd (捷流閥業) is planning to issue 3.542 million new shares before its debut on the Taipei Exchange next month, the valve supplier said at a business outlook presentation on Thursday last week in Taipei.
The rights issue is expected to boost the company’s capital to NT$391 million (US$12.8 million), from NT$355.9 million, said the company, which currently trades its shares on the preparatory Emerging Stock Board.
Established in 1980, Value Valves manufactures valves in various specifications, with butterfly valves being its major revenue contributor and accounting for about two-thirds of total sales.
Downstream applications of the company’s products extend to various sectors, ranging from energy and gas and semiconductor to industrial sectors.
Cumulative revenue in the first 10 months increased 28.29 percent year-on-year to NT$2.01 billion, which was higher than NT$1.84 billion for the whole of last year, the company said in a statement.
Value Valves attributed the increase to rising demand for valve products from the petrochemical industries in the US (shale oil and ethane) and China (crude-oil-to-chemicals projects), as well as from the shipping industry in China due to tough environmental protection regulations.
The company’s net profit in the first three quarters grew 39.78 percent from a year earlier to NT$220.122 million, with earnings per share of NT$6.18, the highest for the same period on record.
Gross margin and operating margin were 31.08 percent and 16.62 percent in the first three quarters, up from 30.43 percent and 16.31 percent respectively.
“Even though the global economy this year is full of many uncertainties, shipments of the company’s valve products are still thriving thanks to increased environmental awareness, increasingly stringent safety standards and the global manufacturing relocation amid the Sino-US trade war,” Value Valves said in the statement.
Value Valves business department general manager Chien Pei-ling (錢佩玲) said at the presentation that the three major growth drivers next year would come from the petrochemical industry, the shipbuilding industry and the returning Taiwanese businesses.
The company has secured orders from Chinese oil giants China Petroleum & Chemical Corp (中國石油化工) and China National Offshore Oil Corp (中國海洋石油), as well as orders from Taiwan Semiconductor Manufacturing Co (台積電), Micron Technology Inc and Google, the Chinese-language Liberty Times (the sister newspaper of the Taipei Times) reported yesterday, citing Chien.
As investors are concerned about the company’s dividend distribution policy, Value Valves chairman Yang Tai-chung (楊大中) said that future capital expenditures are expected to be significantly lower due to the completion of factory renovations, therefore the company would strive to raise its dividend payout ratio to 70 percent, from 50 percent, the Liberty Times reported.
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