 2018-04-19 |
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Taiwan's leading tape manufacturer YC Group has announced that, after experiencing a group-wide integration and losses due to RMB exchange rate fluctuations over the past two years, it has turned its performance around in 2023. YC (4306) reported a turnaround with net profit after tax of NT$588 million and earnings per share (EPS) of NT$1.30, and is expected to return to its previous growth trajectory.
Currently, YC Group operates through three main business segments: manufacturing, packaging distribution, and construction (hotels). The manufacturing segment, which includes tape, film, and acrylic raw materials, accounts for over 80% of total revenue. The group operates seven factories across Taiwan and China, with sales points extending to five continents. The total tape production capacity is 220 million square meters per month, OPP film is approximately 10,000 tons per month, and acrylic and ester production are 80,000 tons per year each. YC is the third largest tape manufacturer globally, with OPP tape holding a 5-8% global market share and PVC tape holding a 10-15% share. The packaging distribution segment is primarily represented by Xinzhou (3171), one of Taiwan’s larger specialized packaging distributors, with over 10,000 active clients. The construction segment currently owns three hotels with a total of 134 rooms, and has launched six construction projects over the years, with good sales and reviews. Currently, only a few projects such as Wangzhou Extreme and Wangzhou MORE are still in the completion and sales phase.
Looking ahead, YC expects improved operational performance as the benefits of its integration and strategic adjustments become apparent. In the tape business, vertical integration and continuous upgrades to automated production equipment are expected to reduce production costs and create competitive advantages. The group is also focusing on higher-margin new products, such as silent tapes and eco-friendly tapes, and actively expanding into export markets like the Americas, the Middle East, and Europe. The goal is to achieve an operating profit margin of 8% within three years, which will help steadily increase revenue and profit from tape, film, and related products. Additionally, Achem Petrochemical, which produces acrylic raw materials, is expected to improve as raw material prices stabilize and China’s stringent environmental checks and capacity reduction policies come into effect, leading to reduced losses.
The packaging distribution business in Taiwan will accelerate new product services and deepen market penetration to increase sales revenue. In the Chinese market, the focus will be on high-quality, large-scale manufacturing firms, which is expected to generate double-digit profit growth. The construction division will continue to deliver profits from the Lin Kou Extreme project and is expected to launch the Lin Kou Phase II pre-sale project and the Xin Zhuang Phase II construction project. Lin Kou Phase II will offer boutique residences ranging from 30-55 ping, with a total projected sales of NT$3.5 billion. Overall, the operations and profitability of Yan Chou’s business units are projected to grow annually. |
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