Shares of Nan Ya Printed Circuit Board (PCB) Corp (南亞電路), the nation's largest and one of the world's top three integrated circuit substrate providers, skyrocketed on their first day of trading on the local bourse yesterday.
Nan Ya PCB shares soared 44 percent to close at NT$360 (US$11.14) on the Taiwan Stock Exchange yesterday, which translated into a healthy return for investors who purchased the shares at NT$250 on Wednesday.
"The momentum could continue into next week but will gradually lose pace," said Andrew Chen (陳治宇), an analyst who tracks the PCB sector for Yuanta Core Pacific Securities Corp (元大京華證券).
Bullish sentiments were bolstered by hype surrounding the company's initial public offering (IPO), rather than industry fundamentals, Chen said, adding that the industry could experience price pressures in the second quarter of this year.
Nan Ya PCB yesterday posted first-quarter sales of NT$8.48 billion, up 85.52 percent from a year earlier. Last year the company generated NT$4.01 billion in net profit, or NT$7.75 per share, and decided to issue a cash dividend of NT$5.9.
A subsidiary of Formosa Plastics (台塑集團), Nan Ya PCB's IPO created a market value exceeding NT$187 billion. The company is known as Formosa Plastic Group's "eighth treasure," with other star performers being Formosa Plastic Corp (台塑), Formosa Petrochemical Corp (台塑石化) and Nanya Technology Corp (南亞科技).
Looking ahead, game consoles would replace personal computers as the main driver of the company's growth in the April-June quarter, SinoPac Securities Corp (建華證券) said in a report released yesterday.
Second-quarter sales were expected to increase by 5.9 percent quarter-on-quarter to NT$8.99 billion, the brokerage said.
SinoPac Securities suggested investors cash in on Nan Ya with a target price of NT$315 for this year.
Meanwhile, Macquarie Securities said it expected the PCB provider to command a 20 percent share of the global market in high-end flip chip substrates this year, ranking just below Ibiden Co of Japan.
Thanks to its aggressive capacity expansion plan and an industry-wide shortage of FC substrates, Nan Ya PCB was likely to see compound annual growth rates of 40 percent and 85 percent for its revenue and net profit, respectively, the Australian securities house said.
Still, Macquarie gave the company a neutral rating with a target price of NT$285, saying it was already trading at a premium compared to its rivals.
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