Turvo (2233 TT): Double-digit top-line growth in 2022; 5-year plan remains intact

2022-01-11 Non-Tech
Turvo (2233 TT): Recent company visit key takeaways

  • Higher margin bicycle component business (19% of 9M21 revenue) replaces automotive component (67% of 9M21 revenue) as new growth driver and is expected to contribute 25% of 2022 revenue versus 18.6%/10% in 2021/2020, thanks to new customers and higher contribution from existing customers.
  • 2022 revenue is expected to increase 15%-20% YoY with gross margin guided to be flat to slightly down YoY largely due to product mix and raw material cost hikes.
  • Continuing capacity expansion in Taiwan at existing factory (through optimization) and the new factory ramp up is expected to take place in 1Q23.
  • Scheduled to launch own-brand new product: Planetary Reduction Gear in 1Q22 and potential application include automated storage retrieval system (ASRS) and automated guided vehicle (AGV).
  • 9M21 EPS reached NT$7.14; 4Q21 revenue -6.7% YoY on auto semi shortage and power rationing in China. Dividend payout policy: payout ratio 60% and all-cash.