Eastech expects to maintain growth
Business Times
24 Apr 2001
EASTERN Asia Technology Limited (Eastech), a Taiwan-based company involved in audio and visual products, expects to maintain growth this year, despite the lacklustre global economy. Chairman J Tim Liou said yesterday the company is confident of maintaining its gross profit margin, which was about 20 per cent last year and 24 per cent in 1999.
Revenue grew 64 per cent to $269.4 million last year from $166.6 million in 1999, while profit jumped a healthy 103 per cent to $11.6 million, from $5.7 million. Mr Liou attributed one source of growth to the global economic slowdown, which has led to increased outsourcing to original equipment manufacturers (OEM) such as Eastech.
Mainboard-listed Eastech also expects returns from heavy research and development expenditure. In 1999 it spent US$3.9 million (S$7.1 million) developing new products - a three-fold increase from US$1.3 million in 1998. The maturation of these products, such as new MP3 players and digital juke boxes, will help improve profit margins. One of the new products is the DVD receiver, which combines a DVD player with features including an AM/FM radio receiver. 150,000 orders have already been confirmed. Mr Liou said: 'Stand-alone DVD players don't have very good profit margins. Since our product is quite unique, we are concentrating on this niche.'
Two new factories in Hungary and China, built in 1999, will reach operational capacity this year. The company also has plans for Malaysian factories to cater to higher-end product markets.
Finally, Eastech expects its branded marketing and Internet appliance arm to expand. Eastech now has exclusive distributorship of 13 brand names and plans to open direct-owned retailing outlets in Taiwan. Its new Internet appliance division is also aiming for an 8 per cent share of the world market by the end of this year. Eastech designs, makes and markets audio/visual, as well as Internet appliance products. Its top three customers last year were Philips, Kenwood and Thomson. |
