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Cheng Hsin Rubber to Stage Rebound This Year after Revenue Declined in 2014

2015/01/26 | By Steve Chuang

After suffering a revenue drop in 2014, Cheng Hsin Rubber Ind. Co., Ltd., Taiwan-based tire maker of the Maxxis brand, is expected to stage a strong rebound this year.

The firm's latest financial report shows revenue for December 2014 of NT$9.792 billion (US$308.89 million), down 9.78% year-on-year (YoY), but adding to its full-year revenue of NT$129 billion (US$4.07 billion), 3.22% less than a year ago. Institutional investors ascribe the decline largely to China's sluggish new-car market, due partly to the country's economic growth slowdown and partly increasingly strict environmental regulations and sumptuary laws enforced on officials.

However, market observers generally believe Cheng Shin will likely see promising revenue growth this year for a couple of reasons, including declining international prices of natural rubber, and U.S.'s intention to impose both countervailing and antidumping duties on tires imported from China, to therefore enable Cheng Shin's tire sales and unit prices to rise 10-20% stateside.

The maker's continuous output expansion will also help drive global sales. For now, the company is boosting capacity at its factories in Chongqing, Zhangzhou and Xiamen of China, to gain a bigger global market share amid bright outlook for the global automotive industry.

Its Zhangzhou plant, under expansion, turns out up to 130,000 motorcycle and bicycle tires daily, and has capacity fully loaded for now.

(SC)

Cheng Shin Rubber's Revenue and Profits in 2014

Annual Revenue Net Profits
Q1

Q2

Q3

NT$129 Bn.

NT$3.66 Bn.

NT$3.38 Bn.

NT$4.64 Bn.

YoY Growth Rate

-3.22%

-13.59%

-26.91%

-1.45%

Source: Market Observation Post System