Teco Electric & Machinery is constructing a factory in India and will complete it at the end of 2022, according to company president Thomas Fann at an August 16 investor conference.
Besides, Teco will set up new production lines in Vietnam, Indonesia, Thailand, and Malaysia and expand production capacity in North America to quickly respond to clients' needs there and save long-distance transportation from Asia to there, Fann said.
While Teco offered energy-saving solutions specifically for use in factories in 2021, power prices were hiked by 8.4% on average and 15% for large power users on July 1, 2022, leading to increasing demand for energy-saving products, Fann noted. Sales revenues from energy-saving products and services for the first half of 2022 increased about 30% on year and those for 2022 are expected to reach NT$4.0 billion (US$134 million), Fann indicated.
Teco has also been actively competing for orders for smart energy solutions, Fann said. Teco has won orders for equipment of onshore transformer substations with a total contract value exceeding NT$8.0 billion and orders worth over US$20 million from US-based E-Skid, Fann noted. Later in August 2020, Teco will participate in an open bid to be held by state-run Taiwan Power Company for setting up an energy storage system with an installed capacity of 60MW in northeastern Taiwan, Fann indicated.
Of second-quarter 2022 consolidated revenues of NT$14.544 billion, 53.6% came from the business group of electric machinery and green mechatronic solutions, 24.6% from smart life, 16.5% from smart energy, and 5.3% from others.
For business operation in the third quarter of 2022, Teco expects sales revenue from electric machinery and green mechatronic solution to grow 14-18% on year, those from smart energy to hike by 58-62%, and those from smart life to decrease by 3-5% and overall gross margin to reach 21-25%.
Teco has reported consolidated revenue of NT$5.228 billion for July, declining 2.63% on month but rising 22.96% on year.
Teco Electric & Machinery: Financial report, 2Q22 (NT$b) | |||||
Amount | Q/Q | Y/Y | 1H22 amount | Y/Y | |
Consolidated revenues | 14.544 | 4.66% | 13.51% | 28.441 | 16.79% |
Gross margin | 22.97% | up 1.07pp | down 0.90pp | 22.45% | down 1.27pp |
Operating profit | 1.287 | 11.82% | 22.45% | 2.438 | 29.82% |
Net profit | 1.021 | 193.39% | (28.90%) | 1.369 | (46.06%) |
Net EPS (NT$) | 0.48 | 0.65 | |||
Source: Company. Compiled by Digitimes Asia, August 2022
