 2015-11-25 |
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(Taipei Central News Agency Reporter Wei Shu) — Packaging giant Xinzhu (3171) has reported an EPS of 1.27 NT dollars for the first three quarters of this year, marking a 54% year-on-year increase and surpassing last year’s total profit. Xinzhu attributes this success to a strategic shift in the Chinese market, focusing on large, key customers, which has significantly improved profit margins.
Xinzhu's third-quarter financial report reveals a quarterly profit of 0.23 billion NT dollars, with an EPS of 0.4 NT dollars, reflecting over 30% year-on-year growth. For the first three quarters, the total profit was 0.75 billion NT dollars, with an EPS of 1.27 NT dollars, representing a 54% year-on-year increase and comfortably exceeding last year’s total profit.
The impressive results are primarily due to a major strategic shift in the Chinese market. Chairman Jiang Wenrong explained that while Xinzhu previously focused on expanding channels and finding customers in China, the varying sizes of customers led to stagnation and increased risk of bad debts. Consequently, the company decided to target large, high-profile customers, resulting in a substantial increase in profitability, even if revenue growth appeared modest.
Additionally, Xinzhu has increased its value-added services in the Taiwanese market, boosting the proportion of multiple processing stages. This approach has led to significant profit growth despite limited revenue increase. The company's net asset value has also risen to 10.31 NT dollars per share, allowing it to regain its credit trading status.
Looking ahead, Jiang Wenrong pointed out that Xinzhu will focus on clear growth drivers. In Taiwan, the company plans to develop the previously overlooked Hualien and Taitung regions to maintain a higher market share. In China, besides refining its business strategy and targeting key large customers, Xinzhu will expand its presence to Guangdong and Shandong provinces. The company has already received large orders from wire and optoelectronics industries and expects to begin shipments in the first quarter of next year. This is expected to result in significant revenue and profit growth in the Chinese market.
Jiang noted that the short-term goal is to focus on growth in the Chinese market. This year, the Chinese market faced challenges from clearing inventory and bad debts. With these issues resolved and new customer contributions in the first quarter, Xinzhu anticipates substantial profit growth. The five-year target is to achieve a 1:1 profit contribution ratio between China and Taiwan. |
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