Hiwin Buys Stake in Luren to Strengthen Robot Manufacturing Muscle
2015/03/27 | By Ken LiuCompiled by KEN LIU
Hiwin Technologies Co., Ltd., reportedly Taiwan's No.1 manufacturer of key components for precision machinery, announced to take over a 41.93 percent stake in Luren Precision Co., Ltd. from Luren's largest shareholder, Princo Corp., to strengthen its robotic-arm manufacturing capability. Hiwin will buy the said shares to increase its holding to exceed half.
Luren Precision Co., Ltd., reportedly Taiwan's top manufacturer of gear-cutting tools, was co-founded in 1994 by six local gear manufacturers and a technical team with advanced technologies spun off from Mechanical and Systems Research Laboratories of the government-backed Industrial Technology Research Institute (ITRI).
Hiwin Chairman and Chief Executive Officer (CEO) Eric Chuo said the acquisition is instrumental in sharpening his company's competitiveness in the global robotic-arm market, with Luren's technologies seen as crucial to such upgrading program.
According to Chuo, Hiwin spent approximately NT$100 million (US$3.22 million) to buy the stake held by Princo, who has transferred to Hiwin in only 10 days.
Princo's president, P.L. Chu, has resigned the chairmanship of Luren to leave the post temporarily filled by Luren's president, S.L. Chen. Luren plans to hold a board meeting sometime this April to choose a new chairman, with Chuo expected to take up the position.
Shortly Luren will raise capital to finance its plans to open a factory at the Hsinchu Science Based Park in northern Taiwan.
Capitalized at around NT$190 million (US$6.12 million), Luren generates revenue mainly through gear-cutting tools, gear-based machine tools, and spinning-pump operations, and expects its annual revenue for 2015 to surpass its 2011 peak of NT$690 million (US$22.25 million). The company depends mostly on Europe, America, mainland China, Southeast Asia and Japan for orders.
Hiwin is shipping over 100 industrial robots a month and coping with flooding orders at two plants in Taichung, central Taiwan. The company has recently launched robots to train lower limb muscles, which have been approved by medical authorities in Taiwan and the European Union, and are expected to begin contributing to the company's revenue by the final quarter this year.
Hiwin projects sales of medical robots to increase to account for over 10 percent of its revenue this year from last year's 8 percent.
Last year the company made after-tax net income of NT$2.26 billion (US$73.12 million), or NT$9.2 per share, on consolidated revenue of NT$15.08 billion (US$486.67 million), making it the most profitable company in Taiwan's machine-tool industry.
Chuo feels cautiously optimistic about the company's operation for 2015, forecasting the company to receive more orders in the second quarter than in the first quarter. He says the market outlook for Taiwan's machine-tool industry remains uncertain despite relatively steady economic growth in the USA and improved prospects in the EU due to the recent implementation of bond purchase or quantitative easing.
Also he thinks Taiwan's machine-tool manufacturers specializing in five-axis machines and combo machines will be more successful to land orders than their domestic peers making light-duty machines and standard-type machines.
As part of plan to strengthen robot-manufacturing capability, the company is also accelerating its expansion plans worldwide, including beginning construction of its phase-two factory at the Taichung City Precision Machinery Innovation Technology Park this June or July, and a factory at the China-Singapore Suzhou Industrial Park in China sometime this year. The maker is also looking for acquisitions in Switzerland and Japan.
Hiwin's Operational Results in Last Five Years
| Year
Operation item
| 2010
| 2011
| 2012 (on consolidated basis)
| 2013 (on consolidated basis)
| 2014 (on consolidated basis)
|
| Revenue
| NT$8.2bn
| NT$14.1bn
| NT$12.3bn
| NT$12.4bn
| NT$15.0bn
|
| Operating income
| NT$2.0bn
| NT$4.1bn
| NT$2.7bn
| NT$2.3bn
| NT$2.8bn
|
| Pretax earnings
| NT$1.9bn
| NT$4.4bn
| NT$2.5bn
| NT$2.5bn
| NT$2.9bn
|
| EPS
| NT$7.41
| NT$15.46
| NT$7.91
| NT$7.96
| NT$9.20
|