Yungtay Shanghai reports impressive Q3 results, turning loss into profit with a tremendous growth of 161%
Major elevator manufacturer Yungtay Engineering Co., Ltd. (1507) held its institutional investor conference today, December 10. General Manager Shangyu Tsai said, “Yungtay, unaffected by the epidemic, has drawn on the domestic demand for manufacturing impetus.” The consolidated financial statements of both sides of the Taiwan Strait indicated that in the first three quarters of this year, 2020, revenue grew 8.5% from the same period last year while operating income reached NTD 968 million, representing a significant increase of 65.7% from the same period last year. In particular, after undergoing the biggest loss of NTD 180 million in one single quarter in Q2 of 2019, Yungtay (China) turned the loss into a profit of NTD 110 million in the third quarter of this year after 18 months of hard work, and the profitability of one single quarter rose as much as 161%, which has become the climax of Yungtay this year. Yungtay will continue to develop the Mainland market with a positive outlook into the future, aiming to return to the top ten in the world.
The operation of Yungtay (China) failed to contribute to the Group’s profitability mainly because the sales that declined drastically led to the loss from 2016 to 2018. Mr. Tsai stated, “The management team led by Chairman Tso-Ming Hsu has been working hard for 18 months, enabling Yungtay to achieve the successful operation and the substantial growth in profitability. Mr. Xu has executed effective business strategy in Mainland as he is personally based in Shanghai and at the helm of the operation. The Mainland China market will once again provide the most important momentum for Yungtay to be even more lucrative in the future, and profits will continue to increase exponentially in anticipation of returning to the Group’s glory of 2013 and 2014, namely, the top ten in the world. Yungtay’s operating profit has been on the rise since the second quarter of 2019. Thanks to the effective product and supply chain management strategy, the successful improvement of gross margin, as well as the effective cost control and the increase of operating scale, the operating profit in the third quarter of 2020 increased dramatically, 221.5%, from the same period last year, and the operating profit ratio soared from 3.6% to 8.9%.
Shangyu Tsai explained, “The operating strategy of Yungtay in Mainland has shown results and successfully increased its market share.” For example, the number of “strategic customers” skyrocketed from 2 in 2018 to 23 in September this year, the direct sales operation grew immensely from 15% in 2019 to 27%, the market share increased from 1.65% in 2018 to 3.03%, and the sales volume rose 111% over the same period, ranking ninth in terms of market share in Mainland. Mr. Tsai said, “The number of order contracts of Yungtay (China) is growing at a rapid pace, with a 64% increase in the third quarter of 2020 from the same period last year. Yungtay is effectively increasing its market share, enhancing sales profitability, and expanding its customer base to drive future warranty and maintenance business in the Mainland market. The management team is confident and excited about Yungtay’s market presence and continued growth in Mainland.”