Sat, Mar 25, 2006 - Page 12 News List

Investors flock to Nan Ya IPO

HOTCAKES Subscribers can earn an expected NT$50,000 if they win the printed circuit board manufacturer's lot drawing ahead of its bourse debut

By Jessie Ho  /  STAFF REPORTER

Nan Ya PCB Corp (南亞電路), the nation's third-largest manufacturer of printed circuit boards, drew a huge number of subscribers to its initial public offering (IPO) on the first two days, following in the footsteps of E-ton Solar Tech Co (益通光能), which made its debut earlier this month.

A subsidiary of the Formosa Plastics Group (台塑集團), Nan Ya PCB is offering 6.8 million shares at NT$250 (US$7.65) per share to the public through a lot drawing system from Thursday until April 3.

The company will hold the lot drawing on April 5, and make its debut on the Taiwan Stock Exchange on April 7.

Shares of Nan Ya PCB weakened by 1.77 percent to close at NT$290 on the Emerging Stock Market (興櫃市場) yesterday. The stock's highest price was NT$336 last Tuesday.

As the average price of Nan Ya PCB is NT$300, investors can expect an immediate return of NT$50,000 if they win the lot drawing.

Despite the reward not being as high as in the case of E-ton's IPO, from which investors earned more than NT$600,000, Nan Ya PCB has lured 62,563 subscriptions on the first two days of its IPO, according to figures released yesterday by the Taiwan Stock Exchange.

"Investors may tend to make quick pocket money from the IPO, especially after the lackluster performance of the stock market this week," said Stanley Yeh (葉德霖), an analyst at Yuanta Core Pacific Securities (元大京華證券).

The hype may boost Nan Ya PCB's share price after the debut, but the winning streak may not last long, Yeh said.

Nan Ya PCB posted NT$24.17 billion (US$742.9 million) in sales last year, with after-tax earnings amounting to NT$4.05 billion, or NT$7.75 per share.

The results may seem rosy, but the company did not start making money until the second half of the year, Yeh said.

Nan Ya PCB obtained more orders of flip-chip (FC) substrates -- a printed circuit board used in high-end electronic products -- after stronger rival Advanced Semiconductor Engineering Inc's (ASE, 日月光) production was cut by a fire in its Chungli (中壢) factory in Taoyuan County last May.

As production at ASE has been stabilizing, along with capacity expansion of rivals such as Kinsus Interconnect Technology Corp (景碩科技), the supply of FC substrates will not be as tight as it was last year, which will further drive down prices, Yeh said.

Eric Lai (賴建承), an analyst at Marbo Securities Consultant Co (萬寶證券投資顧問), held a positive view on the stock owing to the strong demand for FC substrates.

Nan Ya PCB's clients include the world's largest chipmaker, Intel Corp, which has a large demand for FC substrates to be used in its dual-core central processing units. Another boost will come from Sony's PlayStation 3 game consoles.

As a result, some market watchers expect Nan Ya PCB to earn more than NT$25 per share this year, but Lai said that a more moderate outlook should fall between NT$13 to NT$15 per share.

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