Shares of Giant Manufacturing Co (巨大機械), one of the leading bicycle brands in the world, tumbled yesterday amid a sell-off sparked by reports that the company had asked its suppliers for payment postponements.
Giant shares plunged 8.04 percent to NT$206, with 5.99 million shares changing hands on the Taiwan Stock Exchange (TWSE).
The TAIEX lost 0.61 percent to close at 14,522.96 points.
Photo: Cheng I-hwa, Bloomberg
Giant’s stock faced headwinds soon after the local equity market opened as investors took cues from the bicycle giant’s financial situation. The shares continued to trade down to the end of the session, and the sell-off even spread to rival bike maker Merida Industry Co (美利達), whose shares also moved sharply lower by 6.35 percent to close at NT$177.
On Monday, Chinese-language media reported that Giant had asked its suppliers to allow it to postpone payments by 45 days from the original 120 days, citing a letter signed by Giant chief manufacturing officer Yen Ching-hsin (顏清鑫) that was sent to suppliers.
The reports said that the requests would affect suppliers that ship their products to Giant from this month to March.
The requests raised concerns over Giant’s financial condition with the global bicycle market facing weak demand, leading to inventory adjustments, dealers said.
Giant later on Monday said in a statement that the letter signed by Yen was part of a communication channel between the company and its suppliers, and it could not reveal details about its contents due to non-disclosure agreements.
It expressed regret about market speculation caused by the letter being leaked.
The global bicycle industry has been gradually returning to normal operations in the second half of this year as the effects of the COVID-19 pandemic fade, it said.
However, demand for low-priced models continued to fall, raising inventory levels and causing chaos in the supply chain, it said.
As a leader in the global bicycle industry, the company is determined to work closely with its suppliers to deal with inventory adjustments and diversify market risks, Giant said.
It would team up with partners to improve the situation and allow the supply chain to return to normal, Giant said, adding that this was its indispensable responsibility.
The company is grateful to its suppliers, including a large Japanese company, for providing flexibility to its brand by adjusting orders and payments, it said.
However, due to a weakening global market, inventory levels are unlikely to return to normal until the first half of next year, it said.
Japan’s Shimano Inc is a prominent supplier of components for Giant, media reported.
Cheng Shin Rubber Industry Co (正新橡膠), which owns the Maxxis tire brand, Kenda Rubber Industrial Co (建大輪胎), bike chain maker KMC Kuei Meng International Inc (桂盟國際) and aluminum billet producer Taiwan Hodaka Technology Co (穗高科技) are among Giant’s major suppliers in Taiwan.
Giant said that it has completed a rights issue and has issued convertible corporate bonds since Nov. 24 to raise NT$6.75 billion (US$219.7 million) in working capital, adding that its operations remained normal.
It is upbeat about the global bicycle market in the long term, as consumers worldwide have grown increasingly aware of the importance of environmental protection and staying healthy, it said.
In the first nine months of this year, Giant raked in NT$5.63 billion in net profit, up 16.5 percent from a year earlier, or earnings per share of NT$15.01.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”