Uni-President Enterprises Corp (UPE, 統一企業), the nation’s largest food and beverage conglomerate, might see its earnings grow at a compound annual growth rate (CAGR) of 6.3 percent from this year to 2020, Citigroup Global Markets Inc said, citing profit contributions from Uni-President China Holdings Ltd (統一中國控股) and President Chain Store Corp (統一超商).
The Tainan-based company would continue to adjust the product mix of its food and beverage business toward higher-margin items, while the two major subsidiaries would remain solid earnings contributors, Citigroup said.
Uni-President China, which is 70.5 percent owned by UPE, has proven itself superior to rival Tingyi (Cayman Islands) Holding Corp (康師傅控股) in instant noodles and beverages, while President Chain Store, which is 45.4 percent owned by UPE, has been evolving from a merchandise retailer to a competent service provider, with e-commerce being the key driver, Citigroup analysts led by Timothy Chen (陳建光) wrote in a report.
“Together, the two subsidiaries are forecast to account for 53 percent of [UPE’s] profit in 2020, versus 43 percent in 2017,” Citigroup said.
UPE on Wednesday last week reported that net profit in the April-to-June quarter rose 16.5 percent year-on-year to NT$5.48 billion (US$178.5 million).
The company’s earnings per share of NT$0.97 for the second quarter beat a market consensus forecast of NT$0.85 and KGI Securities Investment Advisory Co’s (凱基投顧) estimate of NT$0.92.
“The company’s better-than-expected profit was driven mainly by improving margins as the company continues to upgrade the value of its products,” KGI analyst Angus Chuang (莊政翰) said in a note on Friday.
In the second quarter, gross margin rose by 0.97 percentage points from a year earlier to 34.22 percent and operating margin grew by 0.79 percentage points to 7.1 percent, UPE’s quarterly financial report showed.
The figures were supported by the recovery of its Chinese business, revenue growth at its convenience store unit at home and the consolidation of President Starbucks Coffee Corp’s (統一星巴克) business in Taiwan, which helped consolidated sales rise 10.24 percent annually to NT$110.36 billion, Yuanta Securities Investment Consulting Co (元大投顧) said.
Among UPE’s major subsidiaries, Uni-President China posted second-quarter profit of 457 million yuan (US$66.76 million), up 15.5 percent annually, while Ton Yi Industrial Corp (統一實業), a tin plate and tin can unit, said profit surged 914.3 percent to NT$1.07 billion, which helped offset a 5.66 percent earnings decline at President Chain Store to NT$2.63 billion.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
FUTURE PLANS: Although the electric vehicle market is getting more competitive, Hon Hai would stick to its goal of seizing a 5 percent share globally, Young Liu said Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler and supplier of artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it has introduced a rotating chief executive structure as part of the company’s efforts to cultivate future leaders and to enhance corporate governance. The 50-year-old contract electronics maker reported sizable revenue of NT$6.16 trillion (US$189.67 billion) last year. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has been under the control of one man almost since its inception. A rotating CEO system is a rarity among Taiwanese businesses. Hon Hai has given leaders of the company’s six