Hiwin’s ball screw sales show further improvement in April 2012

by SR on May 7, 2012

Hiwin Tech sales surge, orders likely doing the same

Hiwin Tech monthly sales to April 2012

  • Conclusion: Order book likely looks rather good, but what does it mean? Last month I pondered the sharp improvement in the monthly sales of Taiwanese ball screw supplier Hiwin Technologies and suggested that it may mean we have seen a floor in machinery demand. April 2012 posted another big sequential increase of 25.6% month-on-month and reducing the extent of the year-on-year decline to just a couple of percent. The kind of parts that Hiwin makes – it is one of the world’s leading suppliers, aiming to take the No. 2 spot globally in the near future – require a month or two of lead time, so these sales likely reflect orders in January or February. Moreover, ball screws are vital components for all kinds of equipment, from machine tools to semiconductor production equipment.

    Hiwin Tech monthly sales percent year-on-year change to April 2012

    • Tech capex and Thai machine tools could be the drivers. If ball screw sales are recovering, orders should have bottomed some time ago and this in turn implies demand across a broad cross-section of industries is picking up. Given that Hiwin is a significant player in the ball screw market it’s difficult to dismiss this recovery as just a phenomenon local to Taiwan. I suspect that spending in the tech industry (TSMC boosting capex, for example) and demand for replacements for machine tools damaged in the Thailand floods at the end of 2011 are supporting orders. The share price likes it – see below – but I am still wary of machinery names. Buy Toyota group auto parts and tyre stocks.

    Hiwin Tech monthly sales to April 2012

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