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Garment Maker Makalot's Aug. Revenue up 23% to NT$2.035 Bn.

Sep 15, 2014 | By Steve Chuang

Taiwan-based Makalot Industrial Co., Ltd., a sizable contract manufacturer of apparel for global brand vendors, scored revenue of NT$2.035 billion (US$67.83 million) in August, sharply up 23% month-on-month (MOM), or 30% year-on-year (YoY), to hit a 10-month high, mostly driven by customer restocking

Makalot's latest financial statement shows cumulative revenue for the past eight months at NT$13.255 billion (US$441.83 million), up  15.6% YoY, with January-July pretax profits of NT$1.188 billion (US$39.6 million), soaring  26.29% yearly.

Obviously benefiting from high season, during which American clothing brands begin ordering to restock for the autumn and winter, Makalot, since Q3, has seen shipments rise briskly, to 875,000 dozens in July and 950,000 dozens in August, with July-August revenue of NT$3.686 billion (US$122.86 million). Hopefully, institutional investors forecast, the company is likely to see shipment reach 1.2 million dozens in September to finish Q3 with single-quarter revenue of about NT$5.7 billion (US$190 million).

More good news for Makalot is that its gross profit rate may remain around 20% throughout this year, due partly to having become GAP's tier-one supplier this year, and partly to its effort on adjusting shipment structure to include more high-margin functional clothing.

As such institutional investors generally believe that the firm will witness average selling price of its  products grow 3.5% to US$61.6 per dozen to drive net profits to over NT$500 million (US$16.67 million) in Q3, when its single-quarter shipments are forecast at 3.03 million dozens. The firm's EPS (earnings per share) are also expected to hit a single-quarter high of NT$2.7.

For 2014 institutional investors project Makalot's annual revenue and net profits at NT$19.7 billion (US$656.67 million) and NT$1.772 billion (US$59.06 million), respectively, with EPS of NT$9.3.

Makalot will also likely attain its shipment goal, set by chairman, Frank Chou at an investor conference held early this year of 12-12.5 million dozens in the year, 19% more than 10.5 million dozens last year.

To further boost growth in profit, the firm plans to set up a textile subsidiary in Shanghai through an affiliate abroad next year, which will achieve additional profits from contract manufacturing of textile.

Meanwhile Makalot has been setting up plants in Vietnam and Indonesia to tap business chances brought by the formation of Trans-Pacific Partnership, under which imports to the U.S. will be duty-free. Both new plants will start contributing to Makalot's sales  next year. (SC)


Makalot's Performance by Quarter
Period
Q2, 2013
Q3, 2013
Q4, 2013
Q1, 2014
Q2, 2014
Revenue
NT$4.12 Bn.
NT$5.16 Bn.
NT$4.32 Bn.
NT$5.21 Bn.
NT$4.35 Bn.
Net Profits
NT$290 M.
NT$360 M.
NT$290 M.
NT$480 M.
NT$350 M.
EPS
NT$1.76
NT$2.19
NT$1.76
NT$2.89
NT$2.06
Source: Market Observation Post System


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