Kao Fong Machinery to Set New Highs in 2013 Earnings and Revenue

Machine-tool maker Kao Fong Machinery Co., Ltd. is forecast to score new high in 2013 earnings and revenue, with the latter projected to stay above NT$2 billion (US$66.6 million) and former at NT$1.5 per share.

The company predicts its 2014 revenue to rise 20% from 2013 and earnings to rise to NT$2 per share thanks to steadily recovering automobile industry in the United States, China, South Korea and Japan,

Company president and chief executive officer (CEO), David Shen, points out that the company has received rising orders from auto-parts makers, with NT$480 million (US$16 million) of orders backlogged to keep the company's production lines humming throughout the first quarter of 2014. To fill these orders on time, the company will add shifts on the fourth day of the upcoming weeklong Chinese New Year holidays to begin Jan. 30.

In Jan.-Nov. 2013, the company had consolidated revenue of NT$1.831 billion (US$61.1 million), up 36.54% year on year to attain the goal of NT$1.8 billion (US$60 million). In November, the company raked in NT$181 million (US$6.0 million) in consolidated revenue, soaring 65.62% YoY. With December revenue likely to slightly increase over  November, the company estimates 2013 revenue to stay above the NT$2 billion mark.

The company's 2013 earnings are partly due to gains from its fourth-quarter foreign exchange reserve that came to US$15 million. The New Taiwan Dollar-to-greenback rate dropped to below 30-to-1 in the fourth quarter from 29-to-1 in the third quarter.

To prepare for the coming market recovery in major economies, Kao Fong will inaugurate its 2014 expansion plan in mid-January by building a plant on 6,880 square meters at the Central Taiwan Science Park, with construction scheduled for completion by the end of 2014 and startup in early 2015.

Calling for NT$600 million (US$20 million) in investment, the new plant is designed to build high value added heavy-duty double machining centers, five-axis machining centers, and five-face machining centers, with annual revenue projected at NT$1 billion (US$33.3 million).

Shen feels that the 2014 business cycle for machine tools will not really trend up at least until the end of second quarter due to the Chinese New Year break. (KL)

Kao Fong's Operation Performance (2009~Jan.-Sept.  2013)

Financial Category\Year	2009	2010	2011	2012	Jan.-Sept.2013
Revenue	NT$567M	NT$1.4bn	NT$1.7bn	NT$1.48bn	NT$1.46bn
After-tax net income\loss	-NT$31M	NT$90M	NT$64M	NT$19M	NT$129M
EPS\LPS	-NT$0.37	NT$1.08	NT$0.77	NT$0.22	NT$1.12

Source: the company