New Customer and Product Wins Could Deliver Millions in Revenue
Commercial Vehicle Group, Inc. (Nasdaq: CVGI) recently announced new customer and product wins in the attractive China market in its Global Seating segment that could provide millions in revenue.
Commercial Vehicle Group, Inc. is a leading supplier of electrical wire harnesses, seating systems, and a full range of other cab related products for the global commercial vehicle markets.
PR Newswire reported,
“CVG was awarded the next generation heavy duty truck platform utilizing its World Platform (“WP”) seat solution for Dayun, a leading heavy- and medium-duty truck manufacturer in China.
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CVG Shanghai expects delivery to Dayun to begin in the second half of 2019 ramping up production into 2020. In addition, the Company announced that it will be supplying long-term customer, Foton-Daimler, a newly engineered heat and ventilation seat system for their new high-end truck platform.
CVG has been a long-term supplier to Foton-Daimler, supplying them truck seats on other heavy-duty truck platforms. CVG believes these opportunities combined will provide approximately $7 million to $10 million in annual revenue once fully ramped.”
Patrick Miller, President and CEO, commented on the news, “Our increasing traction in the growing Asia Pacific region is a testament to our team’s dedication and execution on our strategic priorities and demonstrates our product innovation and quality.
Our collaboration with Dayun further positions CVG Shanghai as a supplier of choice based on our high-quality product portfolio and in-region design and development expertise. With our new supply agreement with Foton, we are introducing our integrated heat and ventilation solution to the China market for the first time.
There is a growing interest in truck seat comfort and functionality in this region, and we are well positioned to help customers upgrade to higher-quality seats with greater functionality and sustainable performance.”
The company also recently reported fourth-quarter earnings and Tim Trenary, CFO, commented, “As we head into 2019, we expect further revenue growth related to the record order backlog for North America heavy-duty truck production, as well as continued strength in the global construction equipment market despite some softening in China.
Our initiatives to improve CVG’s financial performance and balance sheet over the last three years have better positioned the Company to invest prudently in strategic growth opportunities.
Today, we have a stronger balance sheet, as we have brought net leverage down to 1.2 times EBITDA and have liquidity of $134 million. As a result, we believe we are well positioned for growth in 2019.”
When factoring in the strength of the company’s earnings outlook, it appears to be an impressive value stock right now.
CVGI should be considered a buy if recent momentum continues.
Look for an entry at $8.61 with a price target of at least $10.71 based on the pattern in the chart.