Micro electromagnetic valves and fluid pumps manufacturer, SCI Precision (4568-TW), is set to go public in early October. The company has been actively expanding into water pumps from its traditional air pump products since last year, and has been adopted by Keurig DrPepper’s capsule coffee machines in North America. Additionally, the company is expected to expand its high-end automotive seat lumbar support market in mainland China. Chairman Zhang Zhi indicated that this will become a new driving force for revenue growth next year.
Established in 1978, SCI Precision currently has a capital of 274 million NTD and is expected to have a capital of 302 million NTD when listed. The company’s main production base is located in Xiamen, Fujian Province, and has been involved in the field of microfluidic pumps and electromagnetic valves for over 20 years. Its micro pumps and valve products are mainly used in the automotive, medical equipment, and home appliance industries. As of the first half of 2018, the revenue breakdown by industry was as follows: automotive 44.81%, medical 37.19%, and home appliances 16.56%. The company’s main customers are international corporations, with a strong customer structure.
SCI Precision’s net profit after tax for the first half of this year was 87.08 million NTD, a year-on-year increase of 28.6%, with an earnings per share of 3.23 NTD. According to industry estimates, the company’s net profit after tax for the whole year is expected to reach 187 million NTD. Based on the listed capital of 302 million NTD, the earnings per share will be 6.19 NTD.
SCI Precision is one of the very few global manufacturers that provide key components for micro air pumps for automotive seat comfort systems. It has close cooperation with international Tier 1 and Tier 2 customers, and its main customers are German car manufacturers. The company is also expanding into Chinese car manufacturers and expects to have new customers in this market next year.
According to market statistics, SCI Precision’s market share in the micro air pump market for automotive seats has reached 70-80%, making it a global leader. Its end customers include well-known car manufacturers such as BENZ, BMW, Bentley, and Porsche, as well as Chinese joint venture car manufacturers such as Guangzhou Automobile Group and Great Wall Motors. Automotive products currently account for more than 40% of SCI’s revenue. The company has few competitors, and the certification period is long, making it difficult for customers to switch suppliers. This advantage allows SCI Precision to maintain its competitive edge in the automotive seat comfort system air pump market.
Yong-Fong Securities is the lead underwriter for SCI Precision’s listing. An earnings briefing will be held on the 6th of this month, and the company is expected to be listed in early October. SCI Precision’s trading price on the emerging stock market today was 107 NTD per share.
