Cheng Shin Rubber Industry Co (正新橡膠), the world’s ninth-largest tire maker, is considering building its seventh plant in China to deepen its presence there.
With six factories in southern and central China, Cheng Shin’s plan to construct a new plant in northern China would help it satisfy growing demand, vice president Wu Hsuan-miao (吳軒妙) said yesterday.
Wu made the remarks after the company held its annual general meeting in Yuanlin (員林), Changhua County, where shareholders agreed to the company’s proposal to distribute a cash dividend of NT$1.5 and a stock dividend of 15 percent, based on last year’s earnings of NT$8.54 billion, or NT$5.64 per share.
“We will come up with a concrete plan on the construction of a new plant early next year, when the global demand for tires is set to stabilize,” Wu said by telephone.
Cheng Shin needs to expand its production capacity to meet demand, as the company’s existing factories are likely to reach full capacity by the end of this year, from about 90 percent capacity at the moment, Wu said.
Cheng Shin, known for its brands CST, Maxxis, Sakura and Presa, also expects its revenue to rise steadily this year from last year on the back of rising car sales in emerging markets and lower raw material costs.
“Demand in China and other emerging markets, such as India and Indonesia, is growing faster than in developed countries,” the company said in a report distributed to shareholders.
Barclays Capital analyst Sidney Yeh (葉昌明) said Cheng Shin is better positioned than its peers in terms of geographic exposure to the European and US markets, where tire demand is weakening.
“Cheng Shin derived 9 percent of its sales from European and North American markets last year,” Yeh said in a note on Tuesday last week. “The exposure is much smaller than [that of] global peers, such as Michelin, Bridgestone, Goodyear and Hankook.”
The company’s combined sales to China and other emerging markets accounted for about 70 percent to 80 percent of its total revenue of NT$12.6 billion (US$420.83 million) in the January-to-March quarter, Wu said.
With the completion of three new factories in China and one in Taiwan in the past year, the company’s total sales of tires are expected to reach 39.2 million units this year, a more than 300 percent increase from 11.26 million units the previous year, the company said. It did not yesterday give revenue and earnings forecasts for this year.
Fubon Securities Investment Services Co (富邦投顧) analyst Will Hsieh (謝文凱) said in a note on May 15 that Cheng Shin could grow its revenue by 10 percent to NT$143.26 billion this year from last year, with net profit increasing 16.9 percent year-on-year to NT$19.45 billion, or NT$6.9 per share.
Cheng Shin shares rose 0.86 percent to NT$93.8 yesterday.
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
GREAT SUCCESS: Republican Senator Todd Young expressed surprise at Trump’s comments and said he expects the administration to keep the program running US lawmakers who helped secure billions of dollars in subsidies for domestic semiconductor manufacturing rejected US President Donald Trump’s call to revoke the 2022 CHIPS and Science Act, signaling that any repeal effort in the US Congress would fall short. US Senate Minority Leader Chuck Schumer, who negotiated the law, on Wednesday said that Trump’s demand would fail, while a top Republican proponent, US Senator Todd Young, expressed surprise at the president’s comments and said he expects the administration to keep the program running. The CHIPS Act is “essential for America leading the world in tech, leading the world in AI [artificial
DOMESTIC SUPPLY: The probe comes as Donald Trump has called for the repeal of the US$52.7 billion CHIPS and Science Act, which the US Congress passed in 2022 The Office of the US Trade Representative is to hold a hearing tomorrow into older Chinese-made “legacy” semiconductors that could heap more US tariffs on chips from China that power everyday goods from cars to washing machines to telecoms equipment. The probe, which began during former US president Joe Biden’s tenure in December last year, aims to protect US and other semiconductor producers from China’s massive state-driven buildup of domestic chip supply. A 50 percent US tariff on Chinese semiconductors began on Jan. 1. Legacy chips use older manufacturing processes introduced more than a decade ago and are often far simpler than
Gasoline and diesel prices this week are to decrease NT$0.5 and NT$1 per liter respectively as international crude prices continued to fall last week, CPC Corp, Taiwan (CPC, 台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. Effective today, gasoline prices at CPC and Formosa stations are to decrease to NT$29.2, NT$30.7 and NT$32.7 per liter for 92, 95 and 98-octane unleaded gasoline respectively, while premium diesel is to cost NT$27.9 per liter at CPC stations and NT$27.7 at Formosa pumps, the companies said in separate statements. Global crude oil prices dropped last week after the eight OPEC+ members said they would
RSS