Taiwanese bicycle manufacturers reported robust revenue growth of 40 to 80 percent in the first two months of this year, with some hitting record highs for January and February, the companies’ data showed last week.
Solid growth momentum and strong orders amid the COVID-19 pandemic-driven bicycle boom would boost the industry’s revenue this quarter, analysts said.
Giant Manufacturing Co (巨大機械), Taiwan’s largest bicycle manufacturer, posted combined revenue of NT$12.19 billion (US$432.5 million) for January and last month, up 40.08 percent from the same period last year, which the company attributed to strong global demand for bicycles amid the pandemic.
Photo: EPA-EFE
Merida Industry Co (美利達), posted cumulative revenue of NT$4.83 billion in the first two months, up 43.74 percent year-on-year, the highest for the period in the company’s history.
Merida, which also sells bicycles under the Specialized Bicycle Components brand, shipped 183,078 bicycles in the two-month period, up 50.05 percent from a year earlier, Merida said in a statement.
Cumulative revenue at Lee Chi Enterprises Co (利奇機械), which produces bicycle components under the Promax brand, surged 81.13 percent to NT$604.02 million in the same period, the company said.
Bicycle chain maker KMC Kuei Meng International Inc (桂盟國際) reported revenue growth of 71.21 percent to NT$1.11 billion, while Topkey Corp (拓凱實業), which produces carbon fiber bicycle parts, reported revenue growth of 52.66 percent to NT$1.29 billion.
Revenue surged due to lifestyle trends amid the pandemic, which raised many people’s awareness of health and physical fitness, analysts said.
Global bicycle demand would remain robust this year, due to governments worldwide promoting cycling and subsidizing bicycle purchases, they said.
“Over the past 25 years, bicycle sales have seen steady annual growth at a single-digit percentage every year,” Yuanta Securities Investment Consulting Co (元大投顧) analysts led by Peggy Shih (施姵帆) said in a note on March 5. “However, amid the COVID-19 pandemic, global bicycle sales volume increased 32 percent year-on-year in 2020.”
Global bicycle orders have doubled or even tripled, and the production lead time is now one to two years, compared with about 60 days before the pandemic, Shih said.
Inventory levels are to drop to record lows amid strong market demand, while strong end-demand has intensified components shortages in the short term, she said.
Delivery times for some bicycle parts have increased to about 300 days, Shih said.
Larger manufacturers such as Giant and Merida have advantages in terms of material and component purchases, and greater bargaining power for finished products, Shih said, projecting that the two firms’ shipments would increase 10 percent and 15 percent respectively this year.
Despite tighter supply, order visibility for KMC’s high-end bicycle chains has extended to the end of this year, she added.
This week’s undoing of the TerraUSD algorithmic stablecoin and its sister token, Luna, has ramifications for all of crypto. First, there is the immediate impact: The rapid collapse of a once-popular pair of cryptocurrencies sent a ripple effect across the industry, contributing to plummeting coin prices that wiped hundreds of billions of market value from the digital-asset market and stoked worries over the potential fragility of digital-asset ventures. Then there are the knock-on effects. In addition to delivering punishing losses to individual users and investment firms, the spectacular failure of a market darling like Terra threatens to have a cooling effect
China’s biggest chipmaker has cut its outlook for the second quarter, joining a growing list of manufacturers warning about the fallout from lockdowns aimed at containing the country’s worst COVID-19 outbreak in two years. Semiconductor Manufacturing International Co (SMIC, 中芯) estimates a month-long lockdown in Shanghai could spur component shortages and logistics tangles, and erase about 5 percent of its output in the second quarter. “We are trying our best to mitigate the impact on product delivery,” SMIC Chairman Gao Yonggang (高永崗) told analysts on a call yesterday morning. “We are still assessing the actual impact as many suppliers restart their
Formosa Plastics Corp (台灣塑膠), the flagship entity of Formosa Plastics Group (台塑集團), yesterday said that it would build a new manufacturing site in Texas at a cost of US$207 million. When completed, the plant would have an annual capacity of 100,000 tonnes of alpha olefins, which are used to make high-density polyethylene (HDPE), among other products, the company said. About 63,000 tonnes would be used by Formosa Plastics, while the remaining 37,000 tonnes would be sold on the international market, it said. The projected completion date of the plant is October 2025, and mass production is scheduled for December that year after a
DISRUPTIONS: The war in Ukraine, China’s lockdown measures, rising interest rates and inflation have thrown a wrench into business plans made years in advance Samsung Electronics Co is talking with foundry clients about charging as much as 20 percent more for making semiconductors this year, joining an industry-wide push to hike prices to cover rising costs of materials and logistics. Contract-based chip prices are likely to rise around 15 percent to 20 percent, depending upon the level of sophistication, people familiar with the matter said. Chips produced on legacy nodes would face bigger price hikes, while new pricing would be applied from the second half of this year, they said, adding that Samsung has finished negotiating with some clients and is in discussions with others. Samsung’s decision
RSS