Gintech surges on first day of trading

The share price of solar-cell maker Gintech Energy Corp (昱晶能源) surged 79.64 percent on its debut on the Taiwan Stock Exchange yesterday, beating its peers to become the local market's highest-priced solar cell stock.

Shares of Gintech closed at NT$397, up from the listing price of NT$221, while the benchmark TAIEX tumbled 3.39 percent to 9,273.09 in the wake of Wall Street's overnight dive.

Other solar shares suffered, however. Larger rival Motech Industries Inc (茂迪) closed down 1.95 percent to NT$352, and E-ton Solar Tech Co (益通光能) shed 3.57 percent to NT$365 on the GRETAI Securities Market.

Founded in August 2005, Gintech's major shareholders include light-emitting-diode (LED) manufacturer Everlight Electronics Co (億光電子), which holds a 2.31 stake in Gintech, and Everlight chairman Robert Yeh (葉寅夫), who owns a 2.08 percent stake.

Gintech's current annual output capacity is 60 megawatts at a plant in Kuanyin Township (觀音), Taoyuan County. After the completion of its new Hsinchu Science Park plant in Chunan Township (竹南) at the end of the year, the capacity is expected to expand to 260 megawatts, information posted on the company's Web site showed.

The company hopes to more than double the capacity of the Hsinchu plant to 480 megawatts with a total of 16 production lines by the end of next year. It plans to keep expanding to 1,350 megawatts by 2011, aiming to become the world's No. 3 solar-cell maker.

Gintech posted a net income of NT$125 million (US$3.9 million), or NT$1 per share, in the third quarter. For the first three quarters of the year, net income was NT$190 million, or NT$2 per share.

Its gross margin rose from 7.05 percent in the first half of the year to 13.5 percent in the third quarter after Gintech secured a stable supply of raw materials from MEMC Electronic Materials Inc, starting in August, rather than buying from the spot market.

The gross margin is expected to rise further with increasing supplies from the US silicon-wafer manufacturer for the next 10 years.

The improving result attracted 112,829 subscriptions -- 112.94 times the total offering -- to its initial public offering at the end of last month.

E.Sun Securities Co's (玉山證券) research department assigned a "buy" rating to Gintech on expected earnings per share of NT$4.03 for this year.