Giant and Merida Both Expected to Score EPS Exceeding NT$10 in 2014

Still benefiting from rising eco-awareness, austerity and urban gridlock to drive demand for cycling globally, Taiwan's two main bicycle makers, Giant Manufacturing Co., Ltd. and Merida Industry Co., Ltd., both are expected to post full-year EPS (earnings per share) of over NT$10 (US$0.33) in 2014, according to institutional investors.

The expectations are realistic, for Giant and Merida have just recorded a new high of NT$3.07 and NT$3.33, respectively, in EPS for Q3, adding to cumulative EPS of NT$8.18 and NT$8.10 for the first nine months of this year, both breaking new highs. With seasonal peaks hitting the industry, the two bicycle makers will very likely report better EPS in Q4.

Enjoying banner bicycle sales in both domestic and overseas markets, Giant chalked up a 14% yearly growth in consolidated revenue of NT$5.02 billion (US$167.33 million) in October, and boosted its January-October consolidated revenue to NT$51 billion (US$1.70 billion), up 9.56% year-on-year (YoY).

With strong performance steadily  driving its stock price in the Taiwanese bourse, Giant's market capitalization has just exceeded NT$103.1 billion (US$3.43 billion) to some NT$10 billion (US$333.33 million) posted more than a year ago.

Merida posted cumulative consolidated revenue of NT$22.642 billion (US$754.73 million) for the first 10 months of this year, including NT$2.483 billion (US$82.76 million) in October and up 6.87% YoY, despite sales in China being dampened by no-holds-barred underselling by local rivals and Chinese government's orders.

Institutional investors expect Merida's gross profits in Q4 to be higher than Q3, primarily because steadily weakening Japanese yen helps the manufacturer further cut costs of outsourcing high-end gear-shift parts and components from Japan. Presently 20% of the company's cost of goods sold are based on Japanese yen.

Another factor driving Merida's sales is the gradually easing fierce underselling in the Chinese market since the beginning of Q4, to  allow the Taiwanese branded vendor more breathing room in the quarter through early next year. One positive sign of the firm's short-term prosperity is its production lines at factories in Taiwan and Shenzhen, China being overbooked through Q1, 2015.

With its stock price recently hitting a record high of NT$243 (US$8.1) per share, Merida's market capitalization also reached a zenith of NT$68 billion (US$2.26 billion). (SC)

Giant and Merida Net Profits in 2014 by Quarter
Company	Q1 (YoY Growth Rate)	Q2 (YoY Growth Rate)	Q3 (YoY Growth Rate)
Giant Manufacturing Co., Ltd.	NT$1.06 Bn. (19.52%)	NT$859.32 M. (3.38%)	NT$1.14 Bn. (24.11%)
Merida Industry Co., Ltd.	NT$724.56 M. (6.74%)	NT$701.35 M. (- 5.82%)	NT$996.36 M. (19.60%)