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Giant Manufacturing Reports Downturn in 2023 Financials Amidst Market Shifts, Eyes Future Growth

Despite a dip in global sales, Giant Manufacturing remains buoyant on China's booming bicycle market and the enduring potential of E-Bikes
g 9921.TW Consumer 250 Mid and Small Cap 2000
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Giant Manufacturing disclosed its financial results for 2023, revealing a 16.4% drop in consolidated revenue, which amounted to 76.95 billion yuan. The company’s after-tax net profit also fell by 41.8% to 3.4 billion yuan, resulting in an earnings per share figure of 8.68 yuan. Despite the downturn, the board has proposed a 5 yuan per share cash dividend, reflecting a yield rate of 2.35% based on the current share price.

The firm attributes the revenue decline primarily to diminished demand for lower-end bicycles in the European and American markets and a reduction in channel inventory. Conversely, the company’s performance in China was robust, with a substantial 60% growth in annual revenue, buoyed by the increasing popularity of cycling as a leisure activity. The strategic focus on high-end bicycles, coupled with an integrated sales and service approach, has fortified Giant’s market presence in China.

Electric-assisted bicycles (E-Bikes) have emerged as a significant revenue component, contributing 30% to Giant Manufacturing’s total income. Despite a temporary slowdown, the company is confident in the E-Bike segment’s potential as a key driver for the mid to long-term market expansion.

The outlook for 2024 is cautiously optimistic, with expected challenges related to inventory destocking and macroeconomic uncertainties. Nevertheless, the enduring demand for high-end models in Western markets, coupled with a vibrant cycling culture in China, is anticipated to bolster future growth. The introduction of innovative products at the Taipei International Bicycle Show signals Giant Manufacturing’s commitment to sustaining its momentum and leveraging the industry’s positive long-term trajectory.

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