Feng Hsin says US-China trade war of limited effect

Posted on 09 August 2018
 

Source: Taipei Times

Feng Hsin Steel Co (豐興鋼鐵), the nation’s leading electric-arc furnace steel producer, said the nascent trade war between the US and China has had a limited effect on its business.

The Taichung-based company — whose main products include round bars, rebar and merchant steel products — has received new round-bar orders from local hand tool makers and screw-and-nut manufacturers.

The round-bar orders are diverted from China’s hand tool makers and screw-and-nut manufacturers in the wake of the tariffs imposed by US President Donald Trump’s administration, the Chinese-language Liberty Times (the Taipei Times’ sister newspaper) reported, citing Feng Hsin executives at an earnings conference on Tuesday last week.

The company said it has clear order visibility for round bars through the end of this year, the report said.

Feng Hsin’s revenue breakdown showed that round bars accounted for 34 percent of its sales in June, while rebar contributed 38 percent and merchant steel products made up 27 percent.

Rebar is a raw material for reinforced concrete used in construction and merchant steel — which includes angle steel and channel steel — is used to make furniture and construction materials.

This year, Feng Hsin’s rebar business gained support from Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) construction of new facilities in the Southern Taiwan Science Park (南部科學工業園), as well as rising prices on the back of higher raw material costs, the company said at the conference.

The demand for merchant steel products would remain robust throughout the year, it said.

A new rebar plant that cost NT$2.8 billion (US$91.2 million) and has an annual capacity of 600,000 to 700,000 tonnes started operations earlier this year, the company said.

Its utilization rate is expected to rise to 95 percent or full capacity by the end of this year, further supporting growth, it said.

Feng Hsin’s optimistic outlook for this year came after its second-quarter net income grew 4.02 percent quarter-on-quarter and 21.2 percent year-on-year to NT$698 million.

Earnings per share (EPS) were NT$1.2, higher than previous quarter’s NT$1.15 and NT$0.99 in the same quarter last year, a company filing with the Taiwan Stock Exchange showed on Tuesday last week.

Consolidated revenue increased 21.4 percent quarterly and 34.33 percent annually to NT$8.21 billion last quarter, company data showed.

Overall, Feng Hsin reported net income of NT$1.37 billion in the first half of this year, up 5.63 percent year-on-year, with EPS rising from NT$2.23 to NT$2.35, while revenue gained 20.79 percent to NT$14.97 billion over the same period.



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