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Yulon, HTC to develop new property in Sindian
BRAND NEW VEHICLE:
The car maker is seeking to give its bottom line a new boost by jointly developing a complex with HTC that will be half commercial and half residential
By Kevin Chen and Lisa Wang
STAFF REPORTERS
Thursday, Feb 28, 2008, Page 11
Yulon Motor Co (裕隆汽車) said yesterday its board had agreed to develop a property complex in a Taipei suburb and expected to make NT$3.282 billion (US$106.2 million) in profit within three years.
In a filing to the Taiwan Stock Exchange yesterday, Yulon said it would sell a 2,525 ping (8,347.11m2) plot of land in Sindian (新店), Taipei County, to High Tech Computer Corp (HTC, 宏達電) for NT$3.335 billion, or NT$1.32 million per ping.
HTC is the world's biggest maker of handsets running Microsoft Corp's operating system.
The two companies also agreed to jointly develop the plot, with Yulon building its headquarters while HTC would establish a new research and development center.
In a different filing yesterday, HTC said that it had signed a memorandum of understanding with Yulon to jointly develop the Sindian complex.
HTC has 1,780 employees in research and development.
Shares of Yulon rose 1.17 percent to NT$43.1 as investors responded positively to the company's announcement the previous day that it would speed up plans to develop the Sindian complex after the presidential election next month.
"We forecast that the company could see annual revenue in the neighborhood of NT$300 million from the area's commercial properties," Jesse Knutson, an equity analyst at SinoPac Securities Corp (永豐金證券), said in a client note yesterday.
"We estimate that the sale of the residential properties could contribute between NT$5.58 and NT$8.12 to EPS [earnings per share] over the next three years," Knutson said.
SinoPac holds an "outperform" rating on Yulon, with a 12-month target price of NT$53.
Yulon president Chen Kuo-rong (陳國榮) told a press conference on Tuesday that the company would develop the Sindian complex in two separate parts.
The first will focus on commercial real estate development while the second would be residential.
Yulon, which assembles and sells Nissan brand cars in Taiwan, is among the domestic automobile makers that have suffered bleak business in the past two years over weak consumer purchases and that are seeking new investments to improve their bottom lines.
The company said new vehicle sales should reach 320,000 units this year, compared to 326,000 units last year -- the lowest level in two decades.
Yulon reported NT$2.58 billion profit last year on a revenue of NT$24.29 billion, with an EPS of NT$1.75. That was compared to a profit of NT$2.97 billion in 2006 with an EPS of NT$2.03 that year, company data showed.
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