Alan Wang, CEO of FCS (6603), the leading manufacturer of plastic injection molding machines, said that FCS is taking orders for up to 6 months, and most of them are models with high gross profit. It is expected that the revenue will reach a record high this year. In addition, FCS invested USD 40 million to build a new plant in Hangzhou Bay, Chinese mainland, which is expected to be put into production in 2023, which will boost operational growth.
Photo/ FCS CEO, Alan Wang
Alan Wang pointed out that the net profit after tax in the first half of this year was NTD 59 million, which was the highest in the past three years, and the net profit per share was NTD 0.4, compared with a loss in the same period last year. The following is an interview summary:
|Figure/ FCS Profile|
Earnings in the first half of the year reached a new high in the past three years
Q: Operating status in the first half of the year?
A: With the recovery of the global economy and the explosion of investment, the demand for plastic injection molding machines is strong. FCS shipments have soared to a new high for four consecutive seasons. In the first half of this year, both revenue and profit have grown substantially, with revenue reaching NTD 2.142 billion, with an annual increase of 86%.
Although there were still shortages of raw materials, soaring sea freight and appreciation of NT dollar exchange rate years ago, the company's profit in the first half of the year reached a new high in the same period of nearly three years, and the customer industries with higher performance growth are transportation equipment, 3C, sports equipment and household products.
After further analysis, the operational growth momentum is mainly attributed to two major factors. Firstly, we actively promoted market segmentation, developed a manufacturing service system with higher added values, and worked hard to refine our products. Therefore, multi-component injection molding machines and two-platen injection molding machines have the highest market share in the transportation equipment industry.
Secondly, FCS is ahead of the industry in deployment, and several overseas self-operated bases were set up in 2019. Under the shackles of the pandemic, the development trend of the global supply chain has changed from long chain to short chain. Although the export of various countries is limited, the local economy can still thrive, thus welcoming the market opportunity after the pandemic and creating a new wave of growth opportunities.
Learn more: FCS Auto Parts Application
Q: Operating outlook for the second half of the year?
A: The company is taking orders for up to 6 months. Due to the stable supply of material sources and the fact that most of the orders are superior models with high gross profit, we are cautiously optimistic about the operation. It is expected that this year's revenue will set a new record.
Although the global pandemic has resurfaced recently, the exchange rate of the NT dollar has strengthened again. Facing the complicated and changeable economic and trade environment, FCS will continue to focus on its industry, develop high-quality new products and new materials and technology applications, invest in select products, and implement a "weight reduction strategy" for the reinvestment division whose operating performance is not as good as expected, and intensify efforts to restructure.
Q: How to expand the layout of the mainland market?
A: According to the GIR market research report, it is predicted that the compound annual growth rate of the global injection molding machine market will be 2.7% from 2020 to 2025, and it is predicted that it will reach NTD 10.45 billion by 2025.
The mainland is the largest production and sales market of plastic injection molding machines in the world. FCS has been deeply involved in the mainland market for 27 years, and it is the only plastic machinery industry in Taiwan that ranks among the top 5 users' brand awareness in Greater China. In view of the huge domestic demand market in mainland China and the continuous improvement of the company's competitive advantage in mainland China, USD 40 million was invested to build the fifth FCS production plant in Hangzhou Bay. The new plant was built in September last year and is expected to be put into production in 2023. The annual output value will be NTD 3 billion, which is expected to double in mainland China.
Further reading：FCS has reached a new milestone
Build a new factory in India for operation in 2025
Q: What is the latest progress of overseas expansion?
A: In order to realize the long-term development strategy of basing itself on Taiwan, laying out Asia and looking at the world, "Direct Marketing Service" will be set up in Thailand, Indonesia and Vietnam in 2019. At the same time, the fourth production plant has been built in Ahmedabad, India, with an annual output of more than 300 injection molding machines.
India has a huge domestic demand market and is more conducive to the company's market development in South Asia, the Middle East and Africa. This year, it is further planned to purchase land to build a new factory with an area of 40,000 square meters, which is expected to be put into use in 2025. It can produce 1,000 injection molding machines per year, including 100 tons of servo hydraulic injection molding machines, 3,000 tons of large opposite injection molding machines and other products. The sales industries cover automobile parts, 3C electronics, food packaging, medical equipment and other industries.
Q: What is your view of new market demand?
A: European Union plans to comprehensively raise the 2030 carbon emission reduction target, which is expected to form a major catalysis for the electric vehicle industry. All car factories are now actively moving towards "lightweight development". According to Nomura Research Institute, steel accounts for more than 70% of automobile raw materials, which is expected to drop to about 62% in 2025, and the rest will be replaced by composite plastics and carbon fiber.
Read more：A Look At Development Trend For New Energy Vehicle Parts!
FCS is optimistic about this trend, and has set up a project team and successfully developed horizontal rotary table multi-component models. Today, it is the "only three" manufacturers with mass production technology in the world, and the company is the only one in Asia.
This model breaks through the inertia problem of vertical rotary table and the influence of gravity of traditional multi-component machines and is especially suitable for the production of automobile interior and exterior decoration parts, automobile skylight, corner window, automobile lampshade and large household appliance shells. With the increasing demand for lightweight, more composite plastics are used in the automobile parts industry, which can be expected to enhance consumption for this series of injection molding machines.
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