ALERT: Tariffs Pose No Material Impact to Highway Holdings' Business
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 15 2025
0mins
Should l Buy HIHO?
Source: PRnewswire
Company's Position on U.S. Tariffs: Highway Holdings Limited has stated that the recent increase in U.S. tariffs on imports from China will not significantly impact its business, as less than 4% of its products are exported to the U.S., with most revenue coming from Europe.
Potential Benefits from Tariffs: The company anticipates that higher tariffs may lead Chinese manufacturers to shift production to Myanmar, which could benefit Highway Holdings by increasing demand for its manufacturing capabilities in that region.
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Analyst Views on HIHO
About HIHO
Highway Holdings Ltd is a holding company mainly engaged in the offering of end-to end manufacturing solutions. The Company is mainly engaged in the design and manufacturing of stamping tools, injection molding parts, brushless DC motor. The Company is also mainly engaged in the production of automation equipment, cleaning equipment. In addition, the Company is engaged in the manual assembly.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Accelerated GDP Growth: The U.S. GDP grew at an annualized rate of 4.3% in the third quarter, up from 3.8% in the previous quarter and exceeding market estimates of 3.3%, indicating potential for economic recovery that may positively influence the stock market.
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See More
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- Mixed Market Reactions: Despite positive economic data, stock market performance was mixed, with the Nasdaq rising by 0.2% while the Dow dipped slightly, indicating varied investor responses across different sectors that may influence short-term market sentiment.
See More
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- Significant Market Potential: The Chinese automotive market is projected to reach $660 billion with a growth rate exceeding 2%, and with sheet metal components comprising about 8% to 12% of vehicles, this acquisition opens up approximately $50 billion annual market opportunities for Highway Holdings, enhancing its competitive edge in this sector.
- Enhanced Technical Capabilities: The acquisition will enable Highway Holdings to offer thick sheet metal cutting, bending, and welding capabilities, addressing a critical gap in its service offerings and allowing direct engagement with local customers in China, thereby increasing market penetration.
- Strong Financial Foundation: With no debt and approximately $5.3 million in cash and cash equivalents, equating to about $1.20 per share, the company is well-positioned to support the acquisition and future M&A strategies, reinforcing its growth trajectory.
See More
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- Significant Market Potential: The Chinese automotive market is valued at approximately $660 billion, with a projected growth rate exceeding 2% over the next five years, and Regent-Feinbau's expertise will enable Highway Holdings to penetrate this rapidly expanding market.
- Enhanced Technical Capabilities: The acquisition will allow Highway Holdings to offer new capabilities in thick sheet metal cutting, bending, and welding, filling a critical gap in its metal components portfolio and attracting more customers to increase market share.
- Strong Financial Foundation: Highway Holdings boasts approximately $5.3 million in cash and cash equivalents with virtually no debt, providing a robust financial base to support this acquisition and future M&A strategies.
See More
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Conditions for Completion: The acquisition is expected to close by the end of March 2026, pending due diligence, negotiation of a definitive purchase agreement, and fulfillment of customary closing conditions.
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Additional Information: The article also mentions Seeking Alpha’s Quant Rating on Highway Holdings and provides financial information about the company.
See More
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- Gross Margin Decline: Gross profit for Q2 was $301,000, with a gross margin of 25.5%, significantly down from 39.4% year-over-year, reflecting the direct impact of reduced sales on profitability.
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See More
