Liantec's Q3 Outlook Surpasses Expectations with New Contracts from American Clients
Preface
The Taiwanese power cord manufacturer, Liantec (2462-TW), is experiencing a positive shift in its order volume. Recently, Liantec secured new contracts from American laptop clients for the upcoming year, increasing its volume by 20-30% compared to the previous year. Production is anticipated to ramp up starting in the fourth quarter. Moreover, the company's forecast for the third quarter is slightly more favorable than initially expected.
Lazy bag
Liantec's third quarter looks promising with increased orders from U.S. clients. Despite early concerns due to rigid tariffs, expectations have been adjusted positively.
Main Body
Liantec Power Cord Company (2462-TW) has recently announced a surge in order volume, attributed to new contracts from its American laptop clientele. The company has witnessed a notable increase in demand by 20-30% over the prior year, with production efforts being ramped up to meet this new demand starting in the fourth quarter of this year.
Earlier in 2023, concerns regarding tariff uncertainties led to customers placing orders ahead of the typical schedule, initially leading the company to anticipate a drop in shipments for the third quarter compared to the second. However, the company maintains that July's performance has held steady with respect to the previous month, suggesting a more stable outlook as international tariff policies have been clarified.
Of significant note is Liantec's new contract with a major American laptop brand. This contract's increased volume will be processed at Liantec's Vietnam facility, expected to reach full capacity by the end of the year, with a monthly production goal of 1.8 million units. Plans are already underway to proceed with a second phase of production expansion as per the company's strategy.
Additionally, Liantec is set to go ex-dividend tomorrow (28th), with a dividend payout of approximately 0.8 TWD per share and an ex-dividend reference price of 23.6 TWD. Over the past seven years, Liantec has consistently distributed dividends, successfully completing rights and dividend adjustments on the first day of ex-dividend trading for three of the past six years.
Key Insights Table
| Aspect | Description |
|---|---|
| Increased Orders | Liantec secured new contracts from American clients, boosting volume by 20-30%. |
| Stable Q3 Forecast | Third-quarter expectations are slightly better than initially projected. |