Merida Industry Co’s (美利達) bicycle orders have increased as governments worldwide ease coronavirus lockdowns, and its order visibility is likely to extend well into next year, KGI Securities Investment Advisory Co (凱基投顧) said.
The growth momentum for electric bicycles is likely to continue this year, which would benefit Merida’s earnings and revenue growth and boost its valuation, KGI said in a note on Tuesday last week.
Merida is a leading mid to high-end bicycle manufacturer, which distributes its products under the Specialized and Merida brands.
The company’s shipments last month increased 25.31 percent year-on-year to 105,343 units and consolidated revenue rose 7.86 percent to NT$258.21 million (US$8.71 million), it said in a statement on June 10.
Its cumulative bicycle shipments in the first five months of the year were 0.24 percent higher than a year earlier at 409,144 units, while cumulative revenue fell 5.83 percent to NT$993.43 million, it said.
“Merida’s shipments of electric bicycles would reach its target range of between 250,000 and 270,000 units this year, which is higher than our estimate of 248,000 units,” KGI analysts Angus Chuang (莊政翰) and Jenny Liu (劉昃恩) said in the note.
“With better-than-expected order visibility for 2021, e-bike shipments could hit 350,000 to 400,000 units next year, higher than our estimate of 337,000 units, given lower inventory and growing consumer preference for bicycles in the post-COVID-19 period,” they said.
KGI said that Merida’s own-brand business in China is also expected to improve this year and boost its revenue generated in China by 20 percent from last year.
“Merida’s Chinese operations are likely to return to profit this year, ending four consecutive years of declines, thanks to more orders for its own-brand bicycles and higher capacity utilization rates,” Chuang and Liu said.
KGI has set a new 12-month target price of NT$230 for Merida’s shares, up from the previous target of NT$206. The new price represents a 19.17 percent increase from its closing price of NT$193 on Wednesday in Taipei trading.
Taiwan’s stock markets are to reopen today after they were closed on Thursday and Friday for the Dragon Boat Festival holiday.
The new target price values Merida at 23 times its estimated earnings per share (EPS) next year of NT$9.99, compared with the estimated EPS of NT$7.85 for this year, KGI said.
Merida’s shareholders on Wednesday approved a proposal to distribute a cash dividend of NT$4.2 per common share, representing a payout ratio of 50.18 percent based on last year’s EPS of NT$8.37.
MOVING ON UP: Taiwan improved in all four areas measured by the IMD, making its biggest leap, from 17th to sixth place, in economic performance Taiwan moved up three spots from last year to place eighth, its best performance since 2013, in the latest annual world competitiveness rankings, released yesterday by the International Institute for Management Development (IMD). Innovation, digitalization, welfare benefits and social cohesion are critical to economic performance, with Switzerland, Sweden, Denmark, the Netherlands and Singapore making up the top five on the list this year, the Switzerland-based institute said, after grading 64 countries and regions based on economic performance, infrastructure, and government and business efficiency. “Leading performers are characterized by varying degrees of investment in innovation, diversified economic activities and supportive public policy,” IMD
With the US opening up to travel, demand in Taiwan for US-bound flights has soared, pushing up ticket prices to most destinations in North America, tourism sources said. Fares for destinations in the US have risen dramatically since the middle of last month, and the trend is expected to continue in the coming months, as California on Tuesday lifted most social distancing and capacity limits put in place to contain the spread of COVID-19, ezTravel Co (易遊網) said in a statement yesterday. The travel agency forecast that the number of tickets sold this month is likely to be double or triple
‘MATTER OF SURVIVAL’: Vice Premier Liu He is to lead the development of ‘third-generation’ chips, a field not yet dominated by any nation or company Chinese President Xi Jinping (習近平) is renewing his years-long push to achieve technology self-sufficiency by tapping a top deputy to shepherd a key initiative aimed at helping domestic chipmakers overcome US sanctions. Chinese Vice Premier Liu He (劉鶴), Xi’s economic czar whose sprawling portfolio spans trade to finance and technology, has been tapped to spearhead the development of so-called “third-generation” chip development and capabilities, and is leading the formulation of a series of financial and policy supports for the technology, people with knowledge of the matter said. It is a nascent field that relies on newer materials and gear beyond traditional silicon,
OPPORTUNITY: The company aims to sell its product soon, as enterovirus vaccines are not available anywhere but China, where firms are only marketing their vaccines locally Medigen Vaccine Biologics Corp’s (高端疫苗) phase 3 clinical trials for an enterovirus 71 (EV71) vaccine completed the multi-regional, multi-central data “unblinding” yesterday, with the results, including safety, immunogenicity and efficacy, meeting its expectations. The company would compile a final analysis report as soon as possible, and apply for the new drug certificate from domestic and foreign drug authorities in the third quarter, Medigen said in a Taiwan Stock Exchange filing yesterday. Its phase 3 trials were conducted in Taiwan and Vietnam with 3,049 participants ranging from two months old to six years old, Medigen said. The company enrolled its first participant for