Nankang Rubber Tire 's FY19 earnings is expected to hit an 8-year high

Nankang Rubber Tire 's FY19 EPS may hit an 8-year high regardless US-China trade war.
Nankang Rubber Tire 's FY19 EPS may hit an 8-year high regardless US-China trade war.

Nankang Rubber Tire (2101-TW) held an investors conference today on May 16th. The company pointed out that even if the US-China trade war is heating up, the utilization rates of the plants in Taiwan Xinfeng and China Zhangjiagang remain high so the company still hold positive outlook. Since new products may start mass production in 2Q19 and the market demand is robust, its 2Q19 revenue/earnings is expected to increase QoQ and its 2H19 revenue/earnings is expected to grow HoH as well. Institutional investors estimated that Nankang Rubber Tire 's FY19 EPS may hit an 8-year high.

The company has completed the capacity expansion. Its daily production capacity has increased by 50% from 12,000 originally. The company told that catalyzed by robust market demand, its capacity utilization rate remains high. Therefore, the company holds positive outlook, even if the US-China trade war is heating up.

Catalyzed by better export and foundry industries, product mix adjustment, and new products such as explosion-proof tires and EV tires, the company’s 1Q19 net profit grew by 6 times YoY and the EPS was NTD0.27.

The company pointed out that after the launch of the new product in 1Q19, mass production will begin in  2Q19. The growth momentum will become stronger. Moreover, the company may enter its peak season in 2Q19 and 3Q19. Its 2Q19 revenue/earnings is expected to increase QoQ and its 2H19 revenue/earnings is expected to grow HoH as well. Institutional investors estimated that Nankang Rubber Tire 's FY19 EPS may hit an 8-year high.

The company’s FY18 sale in Taiwan was only accounted for 4.3% and its export accounted for 95.7%. America and Europe market accounted for more than 30% respectively, and the China market was only accounted for 4.6%.


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