Apparel maker Makalot Industrial Co (聚陽實業) last week reported stronger-than-expected earnings for last quarter, but said that this quarter could be dragged by weak demand amid the COVID-19 pandemic.
Makalot, which supplies ready-to-wear apparel and functional clothing for global brand vendors, posted net income of NT$416 million (US$13.8 million) for the fourth quarter, or earnings per share of NT$1.89, which beat Jih Sun Securities Investment Consulting Co’s (日盛投顧) forecast of NT$1.81.
Revenue last quarter grew 5.7 percent annually to NT$6.45 billion, while the gross margin fell by 1.88 percentage points from a year earlier to 19.16 percent due to the New Taiwan dollar’s appreciation against the US dollar and rising wages in Vietnam.
Makalot — with factories in Taiwan, China, Indonesia, Cambodia, Vietnam and the Philippines — counts GAP Inc, Fast Retailing Co’s GU sub-brand, Kohl’s Corp, Target Corp, Walmart Inc and Hanesbrands Inc among its major clients.
Its operating margin last quarter improved 0.64 percentage points to 9.16 percent, compared with Jih Sun’s 8.48 percent prediction, mainly due to better control of operating expenses.
The company ended last year with a net income of NT$1.93 billion, an increase of 7.13 percent from 2018, or earnings per share of NT$8.66.
Revenue last year increased 13.03 percent to NT$27.05 billion, the company said in a financial statement.
However, revenue for this quarter could fall by 9.53 percent from a year earlier to NT$6.08 billion, as the company faces disruptions in raw material supplies and shipping restrictions due to the pandemic, Jih Sun said in a note on Friday.
Operating margin faces more pressure this quarter amid the virus outbreak, declining to 9.5 percent from 9.55 percent a year earlier, Jih Sun said, adding that earnings per share might fall to NT$2.07 this quarter, down from NT$2.21 in the same period last year.
“Due to the rapid spread of COVID-19 worldwide, major brands have either closed stores or reduced business hours in response, which will drag consumer demand significantly in the short term,” Jih Sun analyst Channie Wang (王章妮) said in the note.
“In addition, the postponement of the Tokyo Olympic Games would increase inventory pressure on clients — who might seek to reduce inventories or cut orders between the second quarter and the third quarter to cope with shrinking end-market demand — while the company also expects production capacity for this year to be flat from last year,” Wang said, adding that Makalot’s shipments might contract 6 percent annually this year.
Makalot’s revenue this year is forecast to drop 9.57 percent annually to NT$24.46 billion, while earnings per share might fall to NT$7.29, down from Jih Sun’s previous forecast of NT$9.47, after factoring in the impacts of lower factory utilization, quarantine and work-from-home conditions, Wang said.
Napoleon Osorio is proud of being the first taxi driver to have accepted payment in bitcoin in the first country in the world to make the cryptocurrency legal tender: El Salvador. He credits Salvadoran President Nayib Bukele’s decision to bank on bitcoin three years ago with changing his life. “Before I was unemployed... And now I have my own business,” said the 39-year-old businessman, who uses an app to charge for rides in bitcoin and now runs his own car rental company. Three years ago the leader of the Central American nation took a huge gamble when he put bitcoin
Demand for artificial intelligence (AI) chips should spur growth for the semiconductor industry over the next few years, the CEO of a major supplier to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said, dismissing concerns that investors had misjudged the pace and extent of spending on AI. While the global chip market has grown about 8 percent annually over the past 20 years, AI semiconductors should grow at a much higher rate going forward, Scientech Corp (辛耘) chief executive officer Hsu Ming-chi (許明琪) told Bloomberg Television. “This booming of the AI industry has just begun,” Hsu said. “For the most prominent
PARTNERSHIPS: TSMC said it has been working with multiple memorychip makers for more than two years to provide a full spectrum of solutions to address AI demand Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it has been collaborating with multiple memorychip makers in high-bandwidth memory (HBM) used in artificial intelligence (AI) applications for more than two years, refuting South Korean media report's about an unprecedented partnership with Samsung Electronics Co. As Samsung is competing with TSMC for a bigger foundry business, any cooperation between the two technology heavyweights would catch the eyes of investors and experts in the semiconductor industry. “We have been working with memory partners, including Micron, Samsung Memory and SK Hynix, on HBM solutions for more than two years, aiming to advance 3D integrated circuit
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
RSS