TsangYow, a major transmission system manufacturer, is experiencing positive growth due to the recovery of the aftermarket (AM) component market. The company's monthly revenue continues to show improvement, and it has recently begun construction on a new factory in Malaysia, scheduled to commence operations in 2027. This expansion aims to enhance order-taking capabilities across diverse industrial markets.
In September, TsangYow's revenue exceeded NT$90 million. While some orders were deferred due to adjustments in shipping schedules, there was a noticeable increase in demand from AM customers in Europe and the United States compared to the previous month, leading to a stable recovery in original equipment manufacturer (OEM) customer shipments.
Examining regional revenue for September, Europe and the Americas saw month-over-month growth rates of 69% and 20%, respectively. Despite the decline in the Chinese and Asian markets, TsangYow's overall monthly revenue grew by 16.4% in September, marking two consecutive months of positive growth.
According to Verband der Automobilindustrie (VDA) statistics, the global outlook for major international new car sales markets in the first half of 2024 shows year-over-year growth rates of 4.4% in Europe, 2.1% in the United States, and 3.3% in China. Comprehensive market research forecasts indicate that global new car sales will maintain moderate growth, although the pace is expected to slow significantly compared to previous years.
Due to inflation, high interest rates, and a conservative economic outlook, consumer demand for vehicles is shifting from new cars to the used car market. However, recent government initiatives worldwide aimed at boosting the economy are driving a rebound in the new car sales market, which is likely to support the shipment momentum for TsangYow and its main clients in AM/original equipment supplier (OES) and OEM sectors.
TsangYow's new factory in Malaysia is scheduled for completion in the fourth quarter of 2026, focusing on producing critical components for semiconductor front-end processing equipment. Mass production is anticipated to begin in 2027, contributing to the group's revenue.
The establishment of the Malaysian facility signifies an important step in TsangYow's strategic positioning within the Southeast Asian market and cross-industry expansion. The new factory not only promises to stimulate local economic development but also enhances TsangYow's competitiveness in the global market, fostering new growth potential for the group.
Looking ahead to the fourth quarter of 2024, TsangYow maintains a cautiously optimistic outlook. Increased order demand from major clients, combined with developments in the semiconductor industry and alignment with the production locations and order needs of primary equipment clients, have prompted accelerated certification processes at the Chiayi plant in Taiwan.
In recent years, TsangYow has actively implemented strategies to optimize overall order structure, improve production efficiency, control costs, and expand into diverse industrial markets. These efforts aim to maximize benefits while scaling up capacity, thereby creating favorable conditions for enhancing gross margins and profitability.
TsangYow reported consolidated revenue of NT$90 million (approx. US$2.8 million) for September 2024, an increase of 16.4% from NT$78 million the previous month, though this represents a decrease of 20.7% compared to NT$114 million in the same period last year. For the January to September period, consolidated revenue totaled approximately NT$808 million, down 25.6% from the same period in 2023.
Excluding the revenue from TsangYow's Wuxi subsidiary in China (which was sold off in August 2023), the cumulative revenue performance for January to September reflects a year-over-year decrease of 10.9%.
