Automaker Yulon Motor Co’s (裕隆汽車) debt and profitability are expected to improve over the next two years, aided by the sale of its electric vehicle brand Luxgen Motor Co (納智捷) for NT$787.6 million (US$25.02 million), Taiwan Ratings Corp (中華信評) said yesterday.
The cash inflow should help Yulon improve its debt-to-earnings before interest, taxes, depreciation and amortization (EBITDA) ratio to between 2 times and 2.5 times next year, from between 2.5 times and 3 times this year, the ratings agency said in a report.
The ratio is expected to drop further to between 1.5 times and 2 times in 2027, it said.
Photo courtesy of Yulon Motor Co
The disposal of Luxgen should also partly help enhance Yulon’s profitability and lower its operating burden, given that Luxgen reported a net loss of NT$253 million for the first three quarters this year, the report said.
The ratings agency expected Luxgen to break even next year or in 2027.
Yulon’s board of directors on Friday last week approved a proposal to sell all of the company’s Luxgen shares to Foxtron Vehicle Technologies Co (鴻華先進), which is 43.83 percent owned by Yulon. That means Yulon would still indirectly hold a major stake in Luxgen after the transactions.
Hon Hai Precision Industry Co (鴻海精密) has a 45.62 percent stake in Foxtron. The deal is expected to be completed in the first quarter of next year.
Yulon Motor is projected to see a dip of 35 percent to 40 percent in production this year, Taiwan Ratings said.
However, its production volume is forecast to expand by about 75 percent to 80 percent next year, as the company continues adopting a multi-brand, original equipment manufacturing strategy and its introduction of Foxtron’s new model B and other models in North America and Oceania markets, the agency said.
The automaker’s major customers for contract manufacturing services include Foxtron and Yulon Nissan Motor Co (裕隆日產), which distributes Nissan vehicles in Taiwan.
Increased production volume and continued efforts to improve production efficiency would enable the company to maintain its EBITDA margin at 9 percent to 10 percent next year and in 2027, compared with 10 percent to 12 percent this year and 8.8 percent last year, Taiwan Ratings said.
SEMICONDUCTORS: The German laser and plasma generator company will expand its local services as its specialized offerings support Taiwan’s semiconductor industries Trumpf SE + Co KG, a global leader in supplying laser technology and plasma generators used in chip production, is expanding its investments in Taiwan in an effort to deeply integrate into the global semiconductor supply chain in the pursuit of growth. The company, headquartered in Ditzingen, Germany, has invested significantly in a newly inaugurated regional technical center for plasma generators in Taoyuan, its latest expansion in Taiwan after being engaged in various industries for more than 25 years. The center, the first of its kind Trumpf built outside Germany, aims to serve customers from Taiwan, Japan, Southeast Asia and South Korea,
Gasoline and diesel prices at domestic fuel stations are to fall NT$0.2 per liter this week, down for a second consecutive week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to drop to NT$26.4, NT$27.9 and NT$29.9 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to fall to NT$24.8 per liter at CPC stations and NT$24.6 at Formosa pumps, they said. The price adjustments came even as international crude oil prices rose last week, as traders
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which supplies advanced chips to Nvidia Corp and Apple Inc, yesterday reported NT$1.046 trillion (US$33.1 billion) in revenue for last quarter, driven by constantly strong demand for artificial intelligence (AI) chips, falling in the upper end of its forecast. Based on TSMC’s financial guidance, revenue would expand about 22 percent sequentially to the range from US$32.2 billion to US$33.4 billion during the final quarter of 2024, it told investors in October last year. Last year in total, revenue jumped 31.61 percent to NT$3.81 trillion, compared with NT$2.89 trillion generated in the year before, according to
SIZE MATTERS: TSMC started phasing out 8-inch wafer production last year, while Samsung is more aggressively retiring 8-inch capacity, TrendForce said Chipmakers are expected to raise prices of 8-inch wafers by up to 20 percent this year on concern over supply constraints as major contract chipmakers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co gradually retire less advanced wafer capacity, TrendForce Corp (集邦科技) said yesterday. It is the first significant across-the-board price hike since a global semiconductor correction in 2023, the Taipei-based market researcher said in a report. Global 8-inch wafer capacity slid 0.3 percent year-on-year last year, although 8-inch wafer prices still hovered at relatively stable levels throughout the year, TrendForce said. The downward trend is expected to continue this year,
RSS