Taiwan-listed Makers of Bicycles and Chains Report Record Jan.-Sept. Results

Three major, Taiwan-listed bicycle-sector companies hit record earnings in the first three quarters, including Giant Manufacturing Co., Ltd., Merida Industry Co., Ltd., and KMC Chain Industrial Co.

Merida says in the first three quarters demand from major export markets such as the U.S. and Europe for high-end mountain and road bikes was quite strong, leading to higher average selling prices (ASP) and sales.

In the first nine months, Merida group reported total sales volume of 1.82 million units, similar to a year earlier, with consolidated revenue in the period up 8% year-on-year (YoY) to NT$20.16 billion (US$671.9 million), a new record for the period in company history, for net earnings of 2.45 billion (US$81.5 million).

KMC reported consolidated revenue of NT$765 million (US$5.5 million) in Q3, for net earnings of NT$136 million (US$4.5 million) and earnings per share (EPS) of NT$1.25 (US$0.04). In the first three quarters, it registered accumulated EPS of NT$3.4 (US$0.11), up 15% YoY.

Some institutional investors predict KMC's monthly revenue in Q4 to climb an average of 20% to 25% YoY, with 2014 EPS of NT$4.5 (US$0.15).

Institutional investors attribute KMC's Q3 profit performance to two major growth engines: Q3 being the traditional shipment peak for assembled bicycles, and strong demand from European and American customers for KMC's high-end chains for 10- and 11-speed high-end mountain and road bikes. Second, KMC took over its Chinese subsidiary KMC Tianjin, which currently has annual production capacity of some 26 million chains, to result in even-stronger growth.

KMC has developed integrated R&D, production and sales. Its Taiwanese plant supplies high-end bicycle chains globally; the Chinese factory produces entry-level bike chains for sale in northern China; while its European and American branch offices  market and sell in their respective  replacement aftermarkets.

Giant reported accumulated first-three-quarter EPS of NT$8.18 (US$0.27), a new high for the period.