Screw maker Sheh Fung Screws Co (世豐螺絲) aims to boost sales in the US and Europe this year, as its overall business is likely to stay flat amid economic uncertainty and a high comparison base last year.
The Kaohsiung-based company offered the cautious forecast after reporting a record-high NT$370 million (US$12.14 million) in net income for last year, or earnings per share (EPS) of NT$6.95.
Net income rose 34.17 percent on an annual basis, while EPS climbed 28.23 percent.
Sheh Fung attributed the increases to healthy demand from do-it-yourself home improvement and construction projects.
Gross margin stood at 22.84 percent, while net margin reached 14.29 percent, supported by a weak New Taiwan dollar, stabilizing raw material prices and strict cost controls, it said.
The local currency last year fell 9.83 percent against the US dollar, making Sheh Fung’s products more competitive on the world stage and allowing the exporter to gain foreign-exchange benefits when settling accounts.
Business is likely to remain steady this year, as downside risks related to geopolitical tensions and monetary tightening would become more evident, which is unfavorable for goods and services, deputy general manager Maggie Chen (陳秀珠) has said.
Still, Sheh Fung aims to boost its presence in the US market, which contributes to more than 60 percent of its overall revenue, as it is the only qualified supplier of newly developed wood screws for retailers there, it said.
The new product generates higher added value and shipments might gain momentum, it said, adding that it would attend major trade shows to raise the company’s brand recognition and secure orders.
Sheh Fung would also seek to expand its market share in Europe, where sales made up 14.39 percent of its total revenue last year, comped with 8.96 percent in 2021, it said.
The rapid growth was related to the eurozone’s imposition of heavy anti-damping tariffs on screws from China, prompting customers there to place orders with Sheh Fung.
The company’s board recently approved plans to distribute a cash dividend of NT$4 per share based on its earnings last year.
That would raise the total payout ratio to 79.14 percent, or NT$5.5 per share, after factoring in the previous cash dividend of NT$1.5 per share, the company said.
The distribution plan, which needs to be approved at a shareholders’ meeting later this year, would suggest a yield rate of 9.47 percent based on Sheh Fung’s closing price of NT$58.1 on Friday.
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