Looking forward to 2027, Guanxing-KY maintains a positive view on operations next year. (Provided by Guanxing-KY)
[Reporter Fang Weijie/Taipei Report] Staple fiber fabric manufacturer Guanxing-KY (4439) has benefited from the continued increase in orders from international brand customers, coupled with the gradual increase in shipments from new American customers, driving operational growth this year. Looking forward to next year, Guanxing-KY Chairman Lin Jinmao said that based on the current order schedule negotiated with customers, the business development and performance prospects next year are positive. The company will continue to expand the production capacity of the Vietnam factory in response to customer demand and future growth momentum.
Guanxing-KY's revenue in the third quarter of this year was 2.472 billion yuan, a record high, with operating gross profit of 420 million yuan, an annual increase of 5.79%; operating profit was 198 million yuan, a quarterly increase of 29.4%, and an annual increase of 10%. The operating profit margin was approximately 8.01%, a quarterly increase of 1.44 percentage points; however, due to the impact of one-time goodwill impairment, earnings per share (EPS) fell from 4.39 yuan before the impairment to 2.93 yuan. The cumulative EPS in the first three quarters of this year reached 8.46 yuan, an annual increase of 7.46%.
Lin Jinmao pointed out that the company has continued to deepen its cooperative relationships with international brand customers in recent years, and through the joint development model, it has helped customers shorten product decision-making and development cycles, and the relevant strategies have gradually shown results. This year, orders from the top three customers including GAP, Adidas, and PUMA have all increased, and shipments from new American customers Old Navy and AEO have also continued to increase, becoming an important driving force for increasing the scale of operations. It is expected that the overall performance this year will increase significantly compared with last year.
In terms of production capacity layout, Guanxing-KY continues to expand the production capacity of its Vietnam factory. As the benefits of the factory expansion gradually become apparent, and the continuation of the momentum of attracting goods from international brand customers, the revenue scale in the third quarter increased. Although the cost of important raw materials such as yarn and dyeing auxiliaries has continued to rise this year, and was at a relatively high level in the third quarter, eroding some profit margins, the company still promoted single-quarter operating profits to maintain quarterly and annual growth through the expansion of revenue scale and improvement in production capacity efficiency.
As for the one-time goodwill impairment in the third quarter, Guanxing-KY explained that it was mainly due to the continued losses of a Chinese garment factory acquired in 2022. Therefore, it decided to recognize a goodwill impairment of 56.33 million yuan in the third quarter, which affected the single-quarter book profit performance. However, if we look at operating profit, the third quarter still increased from 180 million yuan in the same period last year, indicating that the industry's profits have maintained a growth trend.
Guanxing-KY simultaneously announced revenue of 571 million yuan in October, a monthly decrease of 33.53% and an annual increase of 17.75%. The cumulative revenue for the first ten months of this year was 7.192 billion yuan, an annual increase of 17.77%. The company pointed out that October has entered the annual seasonal off-season for shipments, and revenue in the fourth quarter is expected to decline from the third quarter, but is still expected to be better than the same period last year. Looking forward to 2027, as orders from existing international brand customers increase, shipments from new customers increase, and the Vietnam factory continues to expand production, the company maintains a positive view on operations next year.
