Letter to Shareholders

Now, I hereby thanks to every shareholders on behalf of T3EX group for your cares and supports. The Company still keeps the strong business foundation and sensitive market insight to expand the business scale and increase global operating locations including Taiwan, Hong Kong, China, Japan, Korea, Vietnam, Thailand, Cambodia, Singapore, Malaysia, and Indonesia. By effective group resource integration, the Company not only provide an international logistics services but also provide comprehensive logistics such as customs declaration, warehousing, delivering, and supply-chain management. Via deep local culture cultivation and more potential markets development, the Company anticipates that the brand will step to a level of global market leader. 

2017 Review

Expressed in thousands of  New Taiwan Dollars 2015 2014 YoY
Revenue 10,537,008 9,744,113 8.14%
Gross Profit 1,924,035 1,794,218 7.24%
Gross Margin 18.26% 18.41% -0.15%
Operating income 396,445 193,165 105%
Profit after tax 252,737 121,176 108%
EPS(Dollars) 2.07 1.11 86%

The rise of ocean and air freight resulted in the company’s year 2017 revenue increased 8.14% compared to year 2016. And through a strong expense control execution, the company’s operating expense decreased 4.6% compared to year 2016. The year 2017 profit after tax reached NT$ 252,737 thousands, increased by 108% over the same period last year. The year 2017 EPS reached NT$2.07(YoY 86% growth).

On the performance results of various products, ocean revenue was NT$5.905 billion, increased by 5.95% over the same period last year. The gross profit reached NT$ 1.132 billion, increased by 1.41% over the same period last year. In year 2017, the turnaround of global economic increased ocean trade activities, so the Company’s ocean freight volume increased by 4.09% over the same period last year. About the ocean freight, because the shipping capacity was nearly equal to cargo demand, the ocean freight was risen compared to last year, the freight growth rate in USWC, USEC and Europe respectively was 21%, 22%, 12%.

Air revenue in year 2017 was NT$ 3.03 billion, increased by 18.95% over the same period last year. The gross profit reached NT$ 0.427 billion, increased by 8.01% over the same period last year. In year 2017, the global electronical industry grew up fast, such as global vehicle electronics investment, the release of consumer electronical product, the surge of global virtual currency, the spread of global game competition, which enhanced the volume of cross-border air cargo from electronical supply chain. The speedy development of global cross border e-commerce also resulted the high demand of air cargo. The company’s air freight volume increased by 13.63% over the same period last year. However, the air space didn’t expand to meet the growth of air cargo, the air freight was risen up since the start of the year. Especially in 4Q 2017, the oil price surged and the air freight also reached the historic hike in this two years.

Logistics revenue in year 2017 was NT$ 1.629 billion, down by 1.04% over the same period last year. The gross profit was NT$ 0.365 billion, increased by 29.15% over the same period last year. The decrease of logistics revenue as a result of the downgrade of China last-mile logistics service and the reduction of the low profit orders. The company’s logistics revenue decreased but profit increased.

2018 Outlook

In 1Q 2018, the global economic is growing stably. The company’s revenue was NT$ 2.439 billion, merely increased 0.07% than last year, but the profit grew 122% compared to the same period last year. The main reason were the growth of freight volume and the efficiency of custom structured adjustment.  

Looking forward this year, about the international freight, the Company expect the shipping capacity is still oversupply, and the ocean freight should depend on the shipping capacity adjustment from shipping companies. The air freight would rise by international oil price soaring. For the cargo demand, the Company expect the global trade activities is still strong, the freight volume could grow. However, the US-China trade war is still unclear, and it would affect the future global trade. About the China logistics market, the domestic consumption is still sharply growing, the Company expect the import cargo will grow speedily, the import supply-chain logistics services is the next growth momentum.

Future operating strategy and development plan

Thanks to the fast growth of cross-border e-commerce, logistics become the key role of integration of virtual and actual economic. The logistics service providers should transform labor-intensive module to supply-chain service providers.

The Company will continue to integrate internal resource with the asset-light strategy. The below are the main operating strategy and development plan in this year:

  1. Expand the China-Russia-Europe Railway Service.
  2. Through B2B2C warehouse system combination and logistics platform cooperation provide total the logistics total solution services of warehouse-truck transport-express.
  3. Combination overseas locations and agents with China warehouse and transportation service to develop import logistics.
  4. Develop cross border e-commerce logistics including Inter-Asia, USA and Europe area.

We will continue to strengthen our expertise and create greater values for our shareholders.

Chairman: David Yen