Shares of Catcher Technology Co (可成), a Taiwan-based casing supplier, moved up sharply yesterday after the company reported better-than-expected earnings for the first quarter, dealers said.
The buying also reflected hopes that Catcher’s sales will increase quarter by quarter over the rest of the year as its customers launch new notebook computer and smartphone models, they said.
Catcher rose 3.16 percent to close at NT$196, while the TAIEX index was up 0.24 percent at 7,498.84.
“The first quarter results appear encouraging, helping Catcher leave behind the impact of a suspension in operations at its plant in Suzhou,” Horizon Securities (宏遠證券) analyst Benson Huang (黃重善) said.
On Monday, Catcher reported net profit of NT$2.79 billion for the January-March period, up 3.4 percent from the fourth quarter and also up 46.1 percent from a year earlier.
Its earnings per share for the first quarter were NT$3.72, up from NT$3.58 in the fourth quarter and NT$2.86 in the same period of last year, the company said.
“The first quarter EPS was even higher than the range of NT$3.3 to NT$3.5 estimated by the market,” Huang said.
“It is very likely the market will raise the current forecast for the company’s 2012 EPS of NT$17-NT$18 after the first quarter results,” he added.
Last year, the company posted NT$14.93 in EPS, up from NT$6.66 in 2010.
Catcher was forced to shut down its plant in Suzhou, Jiangsu Province by Chinese authorities in October last year for environmental reasons.
“It is possible that the Suzhou production base will resume production later this year, a move expected to bolster its gross margin and benefit the bottom line,” Huang said.
According to Catcher, its gross margin for the first quarter fell 5.1 percentage points to 41.2 percent but rose 1.2 percentage points from a year earlier due to falling sales and a rising NT dollar.
“After the slow season effect of the first quarter fades, I expect Catcher will see its sales and earnings improve quarter by quarter,” Huang said.
Several foreign brokerages, such as Macquarie Securities and UBS Securities, expect Catcher’s sales for the second quarter to rise more than 20 percent from the NT$8.66 billion posted in the first quarter on the back of new model launches by its customers.
Huang said that after recent corrections in share price, Catcher shares are expected to keep recovering as foreign investors have resumed buying its stock.