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Golf Club Maker Dynamic Precision to See EPS Keep Surging in Q2

2014/06/09 | By Steve Chuang

Mainly benefiting from sizable inventory clearance by its biggest customer, TaylorMade, a major brand of golf clubs, Dynamic Precision Industry Corp., a Taiwanese contract manufacturer of golf clubs and heads, expects  EPS (earnings per share) to keep trending upward to a new high in the second quarter of this year, according to institutional investors.

Following months of efforts on improving operational efficiency and optimizing product mix, Dynamic Precision has successfully turned from red to black since suffering losses of NT$97 million (US$3.23 million), or NT$1.52 per share, in the first quarter of last year, when it closed a factory in China.

After scoring EPS of NT$0.5 and NT$1.21 in the third and the fourth quarter of last year, respectively, the firm reported net profits of NT$77 million (US$2.9 million) for the first quarter of this year, with EPS of NT$1.22 being a new high since the outbreak of the global financial crisis in 2008.

The contract manufacturer's rally continues into the second quarter, as its latest financial report shows revenue in May of NT$233 million (US$7.76 million) for an 8.9% increase from April, or 53.2% over last May, adding to cumulative revenue of NT$981 million (US$32.7 million) for the first five months of this year, surging 26.5% from NT$776 million (US$29.2 million) year on year.

Given persistently banner performance in May, and a high gross profit rate of around 22% for a period of time, institutional investors therefore forecast Dynamic Precision to very likely achieve another profit high in the second quarter.

On prospects in June, institutional investors opine that Dynamic Precision may be spared by the industry's seasonal depression, primarily because TaylorMade, to build a large inventory of new products for sale in the third quarter, is expected to keep placing orders with the Taiwanese supplier. (SC)

Dynamic Precision's Performance by Quarter
Quarter

Q2, 2013

Q3, 2013

Q4, 2013

Q1, 2014

Revenue

NT$438 M.

NT$509 M.

NT$626 M.

NT$536 M.

Net Profits

NT$20 M.

NT$32 M.

NT$77 M.

NT$77 M.

EPS

NT$0.02

NT$0.50

NT$1.21

NT$1.22

Source: Market Observation Post System