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.
SUPPLY CHAIN RESHUFFLE: The chipmaker was ‘cautious’ in not making commitments too early in building production in the US, citing ‘geopolitical factors,’ Nikkei Asia said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is considering building an advanced IC packaging plant in the US following a massive investment to set up a wafer fab in Arizona, Nikkei Asia reported. TSMC was considering the plant in response to “Washington’s desire to bring more of the tech supply chain onto home turf,” the report said. TSMC increasingly faces the need to expand in the US, which accounts for about 62 percent of its total sales, Nikkei Asia said, citing three sources who declined to be named. The potential US plant would be equipped with the latest 3D stacking technologies to arrange chips
As much as the US pines for the good old days of global semiconductor supremacy, Japan feels its loss of glory even more. Once a dominant name in electronic components, the nation has been overtaken by Taiwan, South Korea, and, more recently, China. Yet Tokyo might have a viable plan to revitalize its domestic sector. “Unlike the purely domestic, independent way it was done in the past, I think we need to cooperate with overseas counterparts,” Akira Amari, a former economy minister and senior member of the ruling Liberal Democratic Party, told Bloomberg News’ Isabel Reynolds and Emi Nobuhiro this week. That is
Apple Inc has hired Ulrich Kranz, a former senior executive at BMW AG’s electric vehicle (EV) division, to help lead its own vehicle efforts, people familiar with the situation said. The tech giant hired Kranz in recent weeks, about a month after he stepped down as CEO of Canoo Inc, a developer of self-driving EVs. Before cofounding Canoo, Kranz was senior vice president of the group that developed the i3 and i8 cars at BMW, where he worked for 30 years. Kranz is one of Apple’s most significant automotive hires, a clear sign that the iPhone maker is determined to build a
PLEDGE: The contract chipmaker said it would issue at least NT$2.5 a share each quarter and no less than NT$10 per share for the whole of this year Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, yesterday raised its proposed cash dividend for last quarter to NT$2.75 per share from NT$2.5 a year earlier, given the company’s increased earnings. That represents a payout ratio of about 51 percent based on its earnings per share of NT$5.39 in the first three months of this year. TSMC said that its board of directors approved the cash dividend distribution yesterday. The Hsinchu-based chipmaker reassured its investors that it intends to maintain a stable and sustainable dividend policy. The company said that it would issue at least NT$2.5 a share
RSS