Fulgent Sun International Holding Co (鈺齊國際), which supplies sports shoes and functional outdoor shoes to global brands, on Friday reported that operating income in the first quarter rose 35.8 percent year-on-year to NT$356.38 million (US$11.84 million).
Gross margin and operating margin improved by 4.2 percentage points and 2.7 percentage points to 23.8 percent and 12.9 percent respectively, the company said in a statement.
Net income increased 72.5 percent year-on-year to NT$354.14 million, hitting a record high, with earnings per share of NT$2.02, while revenue grew 7.6 percent to NT$2.77 billion, it said.
“First-quarter revenue, operating income and net income all hit new highs for the same period in the company’s history. The increase in operating profit has also been greater than the increase in revenue for five consecutive quarters, demonstrating the results of management efficiency and economies of scale,” the statement said.
Fulgent Sun operates three plants in China, two in Vietnam and one in Cambodia.
The COVID-19 pandemic had led to delays in the restart of plants in China and reduced shipments in February and last month, Fulgent Sun said.
The company also faced challenges in the flow of people, logistics and transportation after the rapid spread of the coronavirus late last month forced governments to tighten measures to contain it, the company said.
“However, with multibrand orders, decentralized production bases, product mix optimization and better production efficiency, first-quarter operating performance and financial indicators were still able to grow against the industry’s trend and set a number of records for the same period,” the company said.
Fulgent Sun said it continued to add capacity to its facilities outside China in a bid to diversify risks, with operations in China, Vietnam and Cambodia accounting for 27.7 percent, 43.2 percent and 29.1 percent of its production capacity respectively in the first quarter.
That indicated non-China production had contributed more than 70 percent to the company’s total capacity, and Cambodia’s capacity has surpassed China’s for the first time, it said.
Still, the pandemic has affected global economic activity, disrupted the company’s production and sales, and led to a conservative attitude by brand customers in placing orders, Fulgent Sun said.
The business outlook for the next few months would depend on global epidemic control and end-market demand, it said.
Meanwhile, contract shoemaker Feng Tay Enterprises Co (豐泰企業) on April 10 reported net income of NT$1.28 billion for the first quarter, down 13 percent year-on-year, with earnings per share of NT$1.75. Consolidated revenue grew 7.01 percent year-on-year to NT$18.097 billion.
Yuanta Securities Investment Consulting Co (元大投顧) holds a conservative view on the company’s outlook this year, citing demand slowdown in the US and Europe, production disruptions in China and India, as well as the NBA suspending its season, which is likely to affect sales growth of Nike Inc’s basketball shoes.
“We expect second-quarter and third-quarter sales to fall up to 5 percent and 2 percent year-on-year [respectively], as Nike is likely to cut orders due to lockdowns in the US and EU markets in the second quarter, implying there will be some inventory buildup afterward,” Yuanta said in a note on Tuesday last week.
END TO SPECULATION: The hotel’s management contract has been extended, despite reports that it wanted to end its alliance with Hyatt Hotels over a deal with Riant Capital Singapore-based Hong Leong Hotel Development Ltd (豐隆大飯店股份) yesterday said it has extended a management contract to ensure the continued presence of the Grand Hyatt brand in Taipei, ending rumors that the two sides were parting ways. “We are pleased Hyatt is able to come to terms on the extension of the management contract of Grand Hyatt Taipei,” said Kwek Leng Beng (郭令明), executive chairman of City Developments Ltd (城市發展) and Millennium & Copthorne Hotels Ltd (千禧國敦酒店). Hong Leong Hotel Development is a subsidiary of Millennium, and both fall under the Hong Leong Group (豐隆集團). The Grand Hyatt Taipei (台北君悅大飯店), owned and built by
’WHITE BOX’: The open platform would give local firms access to Cisco’s cloud-based mobile network to develop 5G telecom equipment and tap into the global market The Ministry of Economic Affairs (MOEA) yesterday introduced a new 5G “open lab” in collaboration with US-based information technology and networking giant Cisco Systems Inc to address the rapidly growing “white box” 5G networking equipment market. The open lab will be a platform where Taiwanese manufacturers can access Cisco’s cloud-based mobile network to develop their own 5G telecom equipment, such as small-cell base stations, network switches, modems and Internet of things (IoT) devices, a ministry statement said. The open platform would allow Taiwanese manufacturers to tap into the lucrative 5G telecom equipment market, which was previously monopolized by Nokia Oyj, Ericsson AB
Nintendo Co is raising its target for Switch production to about 25 million units this fiscal year, people familiar with the matter said, as the ongoing COVID-19 pandemic keeps lifting demand and component shortages ease. The Kyoto, Japan-based company, which in April hiked orders to 22 million units by March next year, is asking partners to tack on another few million units, said the people, who did not want to be identified discussing internal goals. Assembly partners plan to work at maximum capacity through December. The new production target suggests that Nintendo is likely to outperform its Switch sales forecast of 19 million
NERVOUS MARKET: With the infection sources still unknown for three COVID-19 cases that had departed Taiwan, investors have become uneasy, an analyst said Local shares yesterday came under heavy downward pressure, falling more than 1 percent as renewed fears over a possible increase in domestic COVID-19 infections hit market sentiment after the nation last week reported a case related to a Belgian national. Selling focused on the bellwether electronics sector, led by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which pushed down the broader market as investors ignored gains posted by tech heavyweights on the US market at the end of last week, dealers said. The TAIEX closed down 151.77 points, or 1.2 percent, at 12,513.03, on turnover of NT$231.43 billion (US$7.84 billion). Foreign