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Citigroup Inc adds Taiwan Mobile Co to list of top stocks

Citigroup Inc added cellular operators Taiwan Mobile Co (台灣大哥大) and South Korea's LG Telecom Ltd to its list of top stocks, a report said yesterday.

"For Taiwan Mobile, we see much clearer visibility of a bumper capital reduction in the next six to 12 months," Anand Ramachandran, head of Asian telecommunications at Citigroup, wrote in yesterday's report.

Citigroup has a "buy" rating on the stock with a target price of NT$36.

Taiwan Mobile is likely to reduce capital in the next 12 months, after regulations eased and as the sale of a Chunghwa Telecom Co (中華電信) stake raised its cash level "significantly," Citigroup said.

Taiwan Mobile, the nation's second-biggest mobile-phone operator, sold Chunghwa Telecom shares last month for the 11th time this year, bringing its total gain on the sales to NT$1.1 billion (US$33.6 million).

In a separate report yesterday, Citigroup said it "remains positive" about Asia's liquid-crystal-display (LCD) industry.

The brokerage recommended shares including South Korea's LG.Philips LCD Co and Taiwan's AU Optronics Corp (友達光電), the world's second and third-largest makers of LCDs.

"We see significant share-price upside in coming months, driven by better-than-expected third quarter earnings, massive LCD TV sell-through in fourth quarter and a stable cycle into the first quarter of 2007," analyst George Chang (張家麒) wrote in the report.

Prices of PC panels are "rebounding stronger than expected, with 17-inch display likely hitting US$130 by the end September," Chang said.
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