Analysts said yesterday they remain optimistic about the intitial public offering on the stock market of Taiwan Salt Industrial Corp (Taisalt,
The company will take a one-time hit to its profits this year because of its plans to set aside NT$700 million in additional provisioning for pensions.
The additional provisioning is an attempt to avoid having to incur provisioning expenses over the next few years, said Hsu Chun-chieh (
The funds will be allocated for the pensions of Taisalt employees who were forced into early retirement in 1976 and 1982.
"The NT$700 million expenditure will not dampen the interest of shareholders, as the Commission of National Corporations has held the outlay for us," Hsu said. The commission supervises all state-run companies under the management of the Ministry of Economic Affairs.
"We have high expectations for Taisalt's share sale," said Angel Lu (
"Taisalt still retains a favorable image among investors due to its brisk sales figures in recent years," Lu said.
Taisalt, with capital of NT$2.5 billion, reported sales of NT$517 million last year, up from NT$291 million the previous year.
The company was planning to be listed on the local stock market in June.
However, the sale has been postponed until next month due to an unresolved pension dispute.
The company is set to sell 60 percent, or 150 million shares, to investors, Hsu said.
Taisalt was trying to give pensions to its employees forced into retirement for years, but was unabel to do so because of the absence of legal regulations covering such special pensions, Hsu said.
Toward the end of May, the Legislature approved a measure requiring Taisalt to allocate the full budget for the special pensions in its balance sheet this year.
Hsu also said the company was pleased with the proposed share price set by the Commission of National Corporations, which is NT$24.8 per share.
He said that the price is affordable for workers interested in the 10 percent stake reserved for company employees.
One securities analyst viewed Taisalt as one of the most promising companies in the biotech sector on the TAIEX.
"Taisalt can still attract a fair number of investors due to the success of its transformation," said Stanley Yeh (
Besides the salt business that constitutes 64 percent of Taisalt's sales, the company has also been putting effort into developing biochemical products, such as various skincare products, which generate NT$300 million in annual revenues.
Taisalt is also seeking to franchise its retail stores, increasing its number of storefronts from 50 to 100 by the end of the year.
"I think that although Taisalt's financial report may look bad for this year, it won't dampen investors' interest as long as the company can ensure that it has reserve funds to cover the deficit it forecasts," Yeh said.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
ALL ABOUT STRATEGY: The company is optimistic, saying that its gross margin should increase year-on-year, but it is scaling back on its plans to expand capacity Quang Viet Enterprise Co (QVE, 廣越), which makes down jackets and garments for sportswear and outdoor brands including Adidas AG, yesterday said that revenue might drop 5 to 10 percent annually this year as some customers trimmed orders in response to the COVID-19 pandemic. That would mark its first revenue decline since 2016. Quang Viet posted record-high revenue of NT$16.26 billion (US$537.45 million) last year, up 22 percent from 2018. Down jackets made up 40 percent of it revenue last year. North Face Inc and Patagonia Inc are this year likely to reduce orders by 20 to 30 percent from a