Qisda returns to trade, closes limit up

Shares of electronics manufacturer Qisda Corp (佳世達) jumped by the 7 percent daily limit after resuming trading yesterday, helped by asset gains and speculation about a new order from LG Electronics Inc.

Qisda, which was spun off last month from BenQ Corp (明基), is a contract-based electronics maker. The spin-off was part of an effort to revive BenQ after its heavy losses stemming from taking over German Siemens AG's mobile phone unit.

The stock price of Qisda rose NT$2.15 to close at NT$32.8 -- outperforming the TAIEX index's 0.23 percent gain -- after trading in the stock resumed following a 40 percent cut in Qisda's capitalization and outstanding shares.

According to stock exchange's data, Qisda was the most active stock yesterday, with turnover of around 125 million shares.

"The cut in outstanding shares will help boost its earnings per share, but we think improving outlook stock should be the main factor behind the rally," said Andrew Teng (鄧安瀾), a senior strategist at Taiwan International Securities Corp (金鼎證券).

Qisda may earn NT$5 per share at least next year due to massive asset gains from the nation's biggest liquid-crystal-display (LCD) panel maker AU Optronics Corp (友達光電) and a new flat-panel TV order from South Korea's LG, Chinese-language Commercial Times reported yesterday.

Qisda owns 8.6 percent share in AU Optronics, which is expected to benefit from the LCD industry next year.

Last week, the South Korean electronics giant said it had placed an order for 500,000 LCD TVs with Qisda for its sub-brand Zenith TV in the US. It outsourced the order in part because of insufficient panel supplies from AU Optronics, the newspaper said.

Qisda declined to confirm the report, citing client confidentiality.

To improve its financial status, Qisda decided to reduce its capital by NT$1.03 billion (US$32 million), dropping to NT$1.54 billion from its original NT$2.57 billion. It said its net value would improve to NT$11.49 a share from NT$6.8.

Qisda said it expected to return to profit in the third quarter, primarily due to asset gains including NT$1.21 billion from selling an office building to local life insurer Shin Kong Life Insurance Co (新光人壽) in July.

Qidsa made NT$36.47 million in revenues in the third quarter.

The company makes consumer electronics such as LCD TVs and projectors for other brands. BenQ will sell its own-brand products mostly in Asia.