CCSC Technology International Holdings Limited Announces Plan for New Supply Chain Management Center in Central Europe

Rhea-AI Summary

On May 16, 2024, CCSC Technology International Holdings announced plans to build a new supply chain management center in Merosina, Serbia. The 50,000-square-meter facility will commence construction in August 2024 and is slated for completion in 2025. This center will become the headquarters for CCSC's supply chain operations in Europe and will utilize advanced automation and storage technology. CCSC has established a new subsidiary, CCSC Technology Doo Beograd, to oversee operations. The project, fully supported by the Merosina government, has an estimated investment of $6 million. CEO Kung Lok Chiu emphasized that this initiative is part of a strategic plan to enhance business agility and support long-term growth.

Positive

• CCSC plans to build a 50,000-square-meter supply chain management center in Serbia.
• Construction is set to begin in August 2024 and complete by 2025.
• The center will serve as the headquarters for CCSC's supply chain operations in Europe.
• CCSC formed a new subsidiary, CCSC Technology Doo Beograd, in February 2024 to manage the center.
• The facility will adopt modern automation solutions and three-dimensional storage technology.
• The Merosina government supports the project with a signed memorandum of understanding.
• Total investment for the project is estimated at $6 million.
• CEO Kung Lok Chiu noted that the project will enhance business agility and support long-term growth.

Negative

• The completion date of 2025 indicates a long timeline before operational benefits are realized.
• The $6 million investment could impact CCSC's short-term financials.
• Potential operational and logistical challenges in setting up a new center in a foreign country.

Insights

Financial Analyst

The announcement of the new European supply chain management center in Serbia represents a significant capital expenditure for CCSC Technology International Holdings Limited. With an estimated investment of $6 million, this project could impact the company’s cash flow in the short term. However, the long-term benefits may include increased operational efficiency and enhanced market presence in Europe. The strategic location in Serbia, combined with the adoption of modern automation solutions and smart supply chain management platforms, aims to optimize storage and transit operations. The backing by the Merosina government, demonstrated by a signed memorandum of understanding, further indicates local support for the project. From an investor's perspective, the completion of this center could potentially lead to improved margins and profitability, although these gains will likely materialize after 2025 when the center is fully operational. Key factors to watch will be the adherence to the construction timeline and the actual performance improvements post-launch compared to the planned objectives.

Market Research Analyst

Expanding into Europe with a new supply chain management center marks a strategic move for CCSC in broadening its market footprint. Europe’s high demand for interconnect products suggests that this hub could significantly enhance the company’s service capabilities and responsiveness. By leveraging advanced digital technologies and three-dimensional storage, CCSC aims to create a highly efficient supply chain, which is a critical differentiator in the competitive manufacturing sector. This development positions CCSC closer to end-users, potentially reducing logistic costs and delivery times. Market trends indicate increasing demand for efficient supply chain solutions, so this investment aligns well with industry needs. Retail investors should consider the strategic importance of this move in fortifying CCSC's market position and the potential for capturing greater market share in the European region.

Hong Kong, May 16, 2024 (GLOBE NEWSWIRE) -- CCSC Technology International Holdings Limited (the “Company” or “CCSC”) (Nasdaq: CCTG), a Hong Kong-based company that engages in the sale, design and manufacturing of interconnect products, including connectors, cables and wire harnesses, today announced that the Company plans to commence construction of a new Europe supply chain management center (the “Center”) located in Municipality of Merosina, Republic of Serbia (“Serbia”), in August 2024. The 50,000-square-meter facility will be CCSC’s first supply chain center project and is scheduled for completion in 2025. Once completed, it will serve as the headquarters of the Company's supply chain operations in Europe.

To further optimize production efficiency and boost synergy, in February 2024, CCSC formed a new subsidiary, CCSC Technology Doo Beograd, in Belgrade, Serbia. This subsidiary will be responsible for the operations of our new Europe supply chain management. The Company plans to adopt modern automation solutions and three-dimensional storage technology to optimize the use of the storage space, and leverage the latest digital technologies to build a smart supply chain management platform at the Center. The facility will serve as a key integrated supply chain transit hub, supporting the Company's operations across Europe.

This project is fully supported by the Merosina government, with a signed memorandum of understanding marking the collaboration between CCSC Technology Doo Beograd and the Municipality of Merosina. The total investment for the Center is estimated at US$6 million.

Mr. Kung Lok Chiu, Chief Executive Officer and Director of the Company, commented, "As part of our on-going strategic plan, we will continue to widen our strategic moat by investing in supply chain infrastructure to further enhance the agility and resiliency of our business. We believe our new Center will better support our business by driving long-term growth. This initiative is also crucial in our endeavors to become a leader in the interconnect products market. We are committed to adopting the most advanced technologies, developing replicable and scalable solutions, and fostering innovative ideas and products."

About CCSC Technology International Holdings Limited

CCSC Technology International Holdings Limited, is a Hong Kong-based company that engages in the sale, design and manufacturing of interconnect products. The Company specializes in customized interconnect products, including connectors, cables and wire harnesses that are used for a range of applications in a diversified set of industries, including industrial, automotive, robotics, medical equipment, computer, network and telecommunication, and consumer products. The Company produces both OEM (“original equipment manufacturer”) and ODM (“original design manufacture”) interconnect products for manufacturing companies that produce end products, as well as electronic manufacturing services (“EMS”) companies that procure and assemble products on behalf of such manufacturing companies. The Company has a diversified global customer base located in more than 25 countries throughout Asia, Europe and the Americas. For more information, please visit the Company’s website: http://ir.ccsc-interconnect.com.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements, including, but not limited to, the Company's proposed Offering. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that may affect its financial condition, results of operations, business strategy and financial needs. Investors can find many (but not all) of these statements by the use of words such as “may,” “will,” “could,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “propose,” “potential,” “continue”, or other similar expressions in this press release. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and other filings with the U.S. Securities and Exchange Commission.

For more information, please contact:

CCSC Technology International Holdings Limited
Investor Relations Department
Email: ir@ccsc-interconnect.com

Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: investors@ascent-ir.com

FAQ

What is the new project announced by CCSC Technology International Holdings?

CCSC announced plans to build a new supply chain management center in Merosina, Serbia.

When will the construction of CCSC's new supply chain center begin?

Construction is set to begin in August 2024.

When is the CCSC supply chain management center expected to be completed?

The center is slated for completion in 2025.

What is the size of the new CCSC supply chain management center?

The facility will be 50,000 square meters.

What is the purpose of CCSC's new subsidiary, CCSC Technology Doo Beograd?

The subsidiary was formed to manage the operations of the new supply chain management center.

How much is CCSC investing in the new supply chain management center?

CCSC is investing an estimated $6 million in the project.