Asrock shares soar in big board debut

Shares of motherboard maker Asrock Inc (華擎) rallied 8.4 percent during its debut on the main bourse, defying the benchmark TAIEX's 3.90 percent loss following the plunge in the US overnight on growing subprime mortgage concerns.

Asrock stock rose NT$21 to NT$271 from its listing price of NT$250 per share. The 7 percent daily limit does not apply to the trading of new shares in the first five sessions. Asrock shares were traded on the smaller Emerging Stock Market (興櫃市場) before the debut on the main board.

Asrock is a motherboard brand owned by the world's biggest motherboard maker Asustek Computer Inc (華碩電腦), targeting entry-level products to avoid competition with its parent company.

But, the five-year-old company said last week that it planned to shift its focus to middle-range and high-end products to boost profits as growth in the low-end area slows amid rising competition from Hon Hai Precision Industry Co (鴻海精密) and Elitegroup Computer Systems Co (精英電腦).

SinoPac Securities Corp (永豐金證券) gave a "buy" recommendation on Asrock as it expects the new business would help trigger 20 percent annual growth to NT$2.2 billion (US$68 million) in net profits next year.

"Asrock will gain a new driving force after tapping into middle-range and high-end products, which account for 60 percent of the total unit sales of the motherboard industry," SinoPac Securities said in the report published on Monday.

Asrock plans to produce 10 percent to 15 percent more motherboards next year from this year's goal of 7 million units, based on replacement demand for the Vista system and rising demand in the emerging markets, chairman Ted Hsu (徐世昌) told investors.

In the first nine months of the year, Asrock's earnings inched up by nearly 4 percent to NT$1.39 billion, compared to NT$1.34 billion a year ago.

On Tuesday it said it had raised NT$2.86 billion by issuing 11.44 million new common shares during the initial public offering. Asrock now has around 102 million shares in issue.