Makalot Tallies 21.3% YoY Growth in 1Q Consolidated Revenue of NT$5.215 Bn.

Mostly driven by surging orders from popular fashion brands, including Old Navy, Makalot Industrial Co., Ltd., Taiwan's largest apparel manufacturer by size, chalked up a yearly growth of 21.3% in consolidated revenue of NT$5.213 billion (US$173.4 million) for the first quarter of this year, according to the firm's latest financial report.

The report shows that of the total, NT$1.656 billion (US$55.02 million) was generated in March alone, sharply up 16% year-on-year (YoY). For the quarter, the firm shipped garments totaling about 3.2 million dozens, growing 17% YoY, with the average selling price of around US$55 per dozen, up 2.5%.

Benefiting partly from a large customer base and partly optimized product mix, Makalot, engages in both OEM (original equipment manufacturing) and ODM (original design manufacturing), saw cumulative pretax profits for the first two months of this year of some NT$364 million (US$12.1 million), or NT$2.12 per share, soaring 40% year on year to beat institutional investors' growth forecast of 26%. The firm's gross profit rate for the first quarter is estimated to exceed 31%.

As to outlooks in the remainder of this year, institutional investors opine Makalot, whose major customers include such globally known brands as Inditex, H&M, Target and Kohl's, will gain considerable steam mainly from shipment to GAP, given its upgrade by the client to one of the seven Tier 1 contract suppliers. Hence the investors project Makalot's orders from GAP to surge 70% YoY this year, when shipment to the customer will contribute 20% to total revenue, compared to 15% last year.

Makalot's sales will also be driven by expanded capacity overseas. In addition to setting up new production lines in its plants in Vietnam and Cambodia, the firm will establish a new plant in Indonesia, to greatly boost in-house capacity and maintain outsourcing rate at only 18%.

Meanwhile, the firm is also trying to step up developing the sports clothing segment after garnering an order from the new customer  Under Armour, to fuel growth this year. (SC)