Contact lens maker Ginko International Co (金可國際) is expected to report record-high revenue for this quarter on the back of robust online sales from China’s Double 11 Singles’ Day and steady orders for contract manufacturing business in Japan, SinoPac Securities Investment Service Corp (永豐投顧) said in a note on Wednesday last week.
The business outlook for next year is also positive thanks to strong sales of its own branded products in China and healthy growth in contract manufacturing orders from Japan, SinoPac said.
In addition, the company’s average turnover days of accounts receivable is likely to fall further next year after dropping by 30 days this year compared with last year due to a smaller weighting for wholesale distributors, the investment consultancy said.
SinoPac upgraded its “neutral” recommendation on Ginko’s stock to “buy,” with a 12-month target price of NT$235. The stock closed up 1.69 percent at NT$211 on Friday in Taipei trading.
Ginko this year sold new contact lenses under five brands, along with the Hydron (海昌) and Horien (海儷恩) brands that it already markets across Taiwan and China. The company also operates the Formosa Optical (寶島眼鏡) chain in Taiwan.
Cumulative revenue in the first 11 months of the year rose 9.27 percent to NT$7.44 billion (US$246.28 million) over the same period of last year, thanks to steady sales in Taiwan aided by retail channel expansion to drug stores and convenience stores, as well as expanding contract manufacturing business into new product categories for existing clients in Japan.
However, Ginko has seen moderated contact lens sales growth in China of about 10 percent year-on-year, compared with 15 to 17 percent increases in the past few years. This explains the softer sales growth momentum for Ginko this year despite the launch of five new brands, Yuanta Securities Investment Consulting Co (元大投顧) said in a recent note.
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