Auto-parts Maker Tong Yang's Jan. Earnings up 38% YoY

Tong Yang Industrial Co., Ltd., a major Taiwanese maker of aftermarket (AM) plastic body-parts and original equipment (OE) supplier to domestic and international automakers, recently reported good operation results for January, including self-audited pretax earnings of NT$175 million (US$5.8 million), a 38% year-on-year (YoY) increase, and earnings per share (EPS) of NT$0.3 (US$0.01).

Crispin Wu, Tong Yang's president, pointed out that continuing blizzards in North America and Europe have been driving up demand for AM collision parts, and his company has been expanding production capacity to meet such demand and widen its lead over counterparts.

Tong Yang's AM parts business enjoyed a 12% YoY growth in January pretax earnings, which again hit a new high in company history.The Taiwanese auto-parts maker has been adding the number of AM parts certified by major international quality and safety standards such as CAPA, NSF, THACHAM, TUV etc. to supply more high-quality items to meet customer requirements and upgrade profit margins.

The company plans to add a new plastic-parts factory, a new electro-plating facility and two automated warehouses in Taiwan this year to ease the protracted supply shortage.

Tong Yang's OE parts operation registered a 52% YoY increase in self-audited January pretax earnings, to which it attributes increased demand from both local and foreign automakers.

Aiming to be an international tier-1 parts supplier, Tong Yang in 2013 set up an R&D center in the group's plant complex in Tainan, southern Taiwan for product design, material development, production technique advancement, as well as resource integration, with new electro-plating lines for OE products to be set up this year.

In China, the world's largest automobile market, Tong Yang has set up 17 subsidiaries and joint ventures. In conjunction with the volume production at new joint ventures with Chinese automakers in Foshan (Guangdong Province), Xiangyang (Hubei Province) this year, the company's Chinese operation is expected to further expand. New-car sales in China are estimated to grow about 10% in 2014 from about 22 million units in the previous year, and Tong Yang has tied up with most of the top-10 automakers in the nation.

Performance Summary (2010-2013)

	2010	2011	2012	2013
Annual Revenue	NT$20.9 billion	NT$18.28 billion	NT$17.0 billion	NT$19.62 billion
Net Earnings	NT$1.56 billion	NT$1.37 billion	NT$858 million	NT$1.73 billion (pretax)
EPS	NT$2.35	NT$2.06	NT$1.41	NT$2.71 (pretax)
Source: Taiwan Stock Exchange's Market Observation Post System, the company.