Taiwan firms forecast second-half earnings growth

Taiwan firms forecast second-half earnings growth
Published: 13 July 2011

The power rationing policy in China and resulting tightened supply will help Taiwan’s two leading cement producers, including Taiwan Cement Corp. and Asia Cement Corp., to see growing sales and earnings in the second half. 



Both Taiwan Cement and Asia Cement posted solid profits from operations in China in the first half. With weather expected to improve and rising demand, cement prices will rise in the third quarter to continue to benefit Taiwan Cement and Asia Cement, who are expanding production capacity there. 

Institutional investors believe both companies will see earnings continue to grow in the second half, with Taiwan Cement predicting a 20% growth in earnings in the second half from the previous one. 



Asia Cement achieved CNY630m in earnings in China in the first half, with Taiwan Cement expecting over CNY700m from China operations. 

Taiwan Cement said cement prices in the China market, especially in the southern region, will rise in the months to come as production of low-efficiency cement plants will be affected by power rationing.

Taiwan Cement’s subsidiary in China will raise capacity from the third quarter till the end of this year. Taiwan Cement will see monthly shipment reach over 3.5Mt after July, up over 12% from the monthly average of 3.1Mt registered in the first half. 



Rising prices and production capacity will enable Taiwan Cement and Asia Cement to see earnings from China operations hit all-time highs in the second half.