Fri, Sep 08, 2006 - Page 11 News List

Citigroup Inc adds Taiwan Mobile Co to list of top stocks

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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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