SEYI (Shieh Yih Machinery) Poised For Recovery In 2010 Due To Strong Sales In China

Following a challenging 2009, sales in China, the Company’s main market, increased sharply in the Fourth Quarter, with strong orders continuing into 2010.

SEYI (SHIEH YIH MACHINERY) (4533 TT), one of the world’s leading producers of mechanical presses, said today that its China sales are expected to grow significantly in 2010. Strong market conditions lead to a fourfold increase in sales to customers in China during the Fourth Quarter of 2009. In the final three months of the year, China sales amounted to TWD 280.7 million (USD 8.8 million) and accounted for 56 % of the Company’s total revenues, making China the largest market for SEYI’s presses.

In 2010, SEYI will continue to benefit from the growth of the China market. China’s economy grew by 10.7% in last year’s final quarter, and is expected to grow by a further 10% in 2010. SEYI presses are used by a broad base of manufacturers which expand capacity in good times and curtail orders for new presses when economic conditions are uncertain. Approximately 65% of SEYI sales are made to manufacturers of computers, communication equipment and consumer electronics, with the balance being sold to automotive and appliance customers.

In 2010, SEYI will also benefit from the start of production at its second manufacturing facility in China, which is targeted to build larger, higher-margin presses for the country’s rapidly growing automotive industry. In 2009, vehicle production in China increased by 46% to 13.7 million units.

Largely on the back of stronger demand from China, SEYI’s total sales in January were TWD 199 million (USD 6.2 million), and lead times for the delivery of new orders have stretched to 120 days. SEYI is adding workers and machining centers to meet the increased level of demand.

SEYI’s strong growth in China follows a difficult 2009, a year in which the Company’s sales declined by 58% to TWD1.8 billion (USD 56.2 million) from TWD 4.2 billion (USD 131.0 million) in the prior year. Ms. Claire Kuo, who was elected Chairman of the Company’s Board of Directors and named as its Chief Executive Officer, effective July 1, 2009, said, “My first six months as CEO of SEYI was clearly a challenging time for the Company. Our presses are used to manufacture products for a wide range of industries, and our customers adjust equipment purchases quickly in response to changing demand. While we felt the impact of the global economic crisis in 2009, though, we are now benefiting from the economic recovery that is underway, particularly in China.

In addition to a stronger market in 2010, Ms. Kuo noted, SEYI will benefit from actions taken in 2009 to reduce costs and augment the company’s equity capital. “In recognition of weaker markets,” Ms. Kuo said, “we reduced headcount and streamlined operations in 2009. We also issued 20 million new shares of common stock in a rights offering in October, raising TWD 168 million (USD 5.2 million) of fresh equity, which was used primarily to reduce debt and strengthen the Company’s balance sheet.”