Yung Zip Chemical Industrial Co Ltd (永日化學) has been one of the few beneficiaries of COVID-19 after its shares rose nearly 24 percent in the past month as the maker of active pharmaceutical ingredients (APIs) is likely to secure more orders this year due to the coronavirus pandemic.
The uptrend has also boosted the shares of some of its local peers, such as Formosa Laboratories Inc (台耀化學) and Savior Lifetec Corp (展旺生技), as large pharmaceutical companies are likely to source APIs from Taiwanese makers in the wake of supply disruptions in China and India, analysts said.
Formosa Laboratories shares have risen 9.37 percent in the past month, while those of Savior Lifetec have jumped 5.87 percent.
SUPPLY LINE DISRUPTIONS
APIs are the basic inputs for drugs and more than 50 percent of medicine worldwide depends on APIs from China and India, especially analgesic APIs, antibiotic APIs and vitamins.
However, API supply disruptions in China due to environmental concerns and transportation difficulties, coupled with India’s export ban on 13 key pharmaceutical ingredients and related formulations, have led to a massive increase in prices, prompting major pharmaceutical firms to divert orders to Taiwanese suppliers, analysts said.
“We believe Taiwanese API manufacturers could see concentrated orders in [the first half of] 2020, if large pharmaceutical companies become wary of an API supply gap worldwide. Specifically, analgesic API and antibiotic API providers should see increased orders due to their urgency for routine clinical use, as well as their critical role in coronavirus treatment,” Yuanta Securities Investment Consulting Co (元大投顧) analyst Jane Jiang (蔣欣穎) wrote in a report on Monday.
Yung Zip — whose product portfolio includes analgesic APIs and the antiviral drug acyclovir, as well as excipients and specialty chemicals — could benefit from rising average selling prices thanks to an increasing number of orders, Jiang wrote.
“In addition to the benefits from increased [average selling prices] and orders, Yung Zip’s higher stocking requirements also provide the company with an advantage during a shortage of raw materials,” she wrote.
Yung Zip, in which YungShin Global Holding Corp (永信藥品) holds a 20.8 percent stake, turned profitable last year after six consecutive years of losses owing to sales growth in higher-margin markets such as Japan, the EU and the US.
The company posted net income of NT$31 million (US$1.02 million) last year, or earnings per share of NT$0.74, compared with a loss of NT$15 million, or minus-NT$0.35 per share, the previous year.
Revenue grew 17 percent to NT$417 million last year and gross margin improved by 10.92 percentage points to 27.98 percent, company data showed.
Yung Zip on Wednesday last week announced that it planned to acquire a 70 percent stake in Taiwan Way Chein Industrial Co (台灣味群工業) for NT$139.65 million.
It plans to use Taiwan Way Chein’s facilities to expand its capacity by 30 percent in two to three years, Jih Sun Securities Investment Consulting Co (日盛投顧) said in a client note on Monday.
TECH RACE: The Chinese firm showed off its new Mate XT hours after the latest iPhone launch, but its price tag and limited supply could be drawbacks China’s Huawei Technologies Co (華為) yesterday unveiled the world’s first tri-foldable phone, as it seeks to expand its lead in the world’s biggest smartphone market and steal the spotlight from Apple Inc hours after it debuted a new iPhone. The Chinese tech giant showed off its new Mate XT, which users can fold three ways like an accordion screen door, during a launch ceremony in Shenzhen. The Mate XT comes in red and black and has a 10.2-inch display screen. At 3.6mm thick, it is the world’s slimmest foldable smartphone, Huawei said. The company’s Web site showed that it has garnered more than
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
Vanguard International Semiconductor Corp (世界先進) and Episil Technologies Inc (漢磊) yesterday announced plans to jointly build an 8-inch fab to produce silicon carbide (SiC) chips through an equity acquisition deal. SiC chips offer higher efficiency and lower energy loss than pure silicon chips, and they are able to operate at higher temperatures. They have become crucial to the development of electric vehicles, artificial intelligence data centers, green energy storage and industrial devices. Vanguard, a contract chipmaker focused on making power management chips and driver ICs for displays, is to acquire a 13 percent stake in Episil for NT$2.48 billion (US$77.1 million).
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
RSS