Rexon Industrial Corp Ltd (力山工業), a maker of fitness equipment and power tools, is to see a 60 to 70 percent year-on-year surge in revenue this year on the back of growing treadmill shipments to US fitness equipment company Peloton Interactive Inc, TF International Securities Group Co (天風國際證券) analyst Kuo Ming-chi (郭明錤) said on Thursday.
Taichung-headquartered Rexon, which assembles more than 90 percent of Peloton’s treadmills and 25 percent of its stationary bikes, would see revenue increase to NT$13.4 billion (US$445.2 million) this year, Kuo said in a report.
Rexon’s advantages in design and development would help it secure almost all orders for new treadmills from Peloton from next month, as the US firm is expected to launch its next generation of equipment between the end of this quarter and the start of the next, he added.
“If shipments are steady, Rexon could remain Peloton’s sole supplier of treadmills for up to six months,” Kuo said in the report.
Peloton is expected to contribute an estimated NT$10.2 billion to Rexon’s revenue, a 111 percent year-on-year increase, he said.
Rexon is this year expected to see an 800 percent year-on-year increase in shipments to Peloton of treadmills and stationary bikes to 236,000 and 830,000 units respectively, the report said.
New York City-based Peloton, which operates a streaming platform that allows users to participate in various courses through a monthly subscription service, would see tremendous growth in market demand as consumers remain confined indoors amid the COVID-19 pandemic, the report said.
“This enables users to work out at home at any time while satisfying their need for social interaction,” Kuo said.
Pointing to lockdowns in Europe that are stricter than those in North America, Kuo said that demand from the European market would surpass that of Peloton’s home market, boosting its shipments.
Rexon, which also designs and develops rowing machines, is expected to continue benefiting from Peloton, as the US firm aims to expand its presence in the fitness equipment market through the launch of rowing machines within the next two years, he said.
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