Orders to Keep Rechi Precision Humming Thoughout Q4, 2013

After seeing shipments rise to over one million compressors in October alone, Rechi Precision Co., Ltd. has sold all its capacity for November and December, triggering the company's expectation to meet the goal of shipping 12 million compressors by the end of 2013.

Company executives say the fourth quarter is normally a high season for the company's exports. Industry executives put the company's earnings at NT$2 or so per share for 2013.

According to the company, it has not just won orders for 200,000 camper air-conditioner compressors from North America, but also lured considerable North American orders away from its competitors, not to mention the surge in orders from Europe and China.

The company's orders received in the fourth quarter of 2013 rose around 10% on average year on year, with monthly shipments topping one million systems.

Rechi executives point out the company shipped 1.01 million compressors in October alone, soaring over 26% from 800,000 compressors it delivered in the same month of 2012. The company has been contracted to build over one million compressors each in November and December, compared with 970,000 and barely one million systems it shipped in each comparable month.

They add that the company's sales were even strong in the normally slack third quarter of 2013, achieving an increased earnings of NT$0.47 per share. In the first three quarters, the company made NT$1.1 billion (US$38.4 million) in pre-tax earnings and NT$673 million (US$22.4 million) in after-tax net income, or NT$1.48 per diluted share.

Company executives ascribe the third-quarter earnings mostly to the company's listing of loss from foreign exchange and expenditure in the same quarter of 2012. They say the company's gross margin for the third quarter of 2013 rose to 16-17% without injection of income from foreign exchange.

Brisk business forced the company to prepare production capacity earlier in September 2013 than over the past few years.

In the Jan.-Oct. period of 2013, the company shipped 9.8 million compressors from factories on both Taiwan and China, up 10.29% YoY to generate consolidated revenue of NT$13.5 billion (US$451.1 million), up 6.22% year on year and a new high. (KL)