Tue, Nov 06, 2012 - Page 13 News List

Eastern Technologies Holding’s IPO a success

By Helen Ku  /  Staff reporter

Eastern Technologies Holding Ltd (東科控股), the world’s biggest contract manufacturer of speaker systems, closed more than 3.17 percent above its initial public offering (IPO) price on the first day of trading yesterday, outperforming the benchmark index, which fell 0.35 percent.

Eastern Technologies opened at NT$65 a share on its debut, 8.33 percent higher than its IPO price of NT$60. The stock ended at NT$61.9 after moving from an intra-day low of NT$56.3.

The Cayman Islands-registered company provides high-end speaker systems for home theaters, mobile devices, personal computers, music centers and LCD televisions. It also manufactures wireless earphones with built-in chips for users to enjoy high sound quality without distance limitations.

Eastern Technologies chairman Tim Liou (劉政林) said cloud computing technologies have hugely impacted people’s lives while boosting the company’s business.

“After downloading music or movie files from databases ‘up in the clouds,’ our cordless earphones can automatically detect sound signals through sound docks and deliver high-quality audio, providing users mobility at home or at work,” Liu said at the headphones’ launch.

Compared with the high-end speaker systems made by Beats Audio and Bose Corp, Eastern Technologies’ products are more moderately priced to attract the world’s top-tier consumer electronics manufacturers like Panasonic Corp, Sony Corp, Royal Philips Electronics NV and LG Electronics Co, company spokesman Jeno Chang (張柏照) said by telephone.

“Our products have a unique selling point in their price-to-performance ratio,” Chang said. “Beats or Bose products may be of better quality, but our prices are more attractive to consumers. That’s why we can count four [Panasonic, Sony, Philips and LG] of the world’s top five consumer electronics manufacturers as our clients.”

Eastern Technologies holds 22 percent of the world’s sound system market, 13 percentage points higher than the second-largest speaker maker in the world, the company said.

In an investors’ conference held last month, Eastern Technologies’ management said it will supply South Korea’s LG Electronics with six models of flat-panel TV sound bars next year after delivering three models this year.

“We are in negotiation with the world’s largest furniture retailer, Ikea Group, to customize a new string of speaker systems for their TV cabinets with our sound bars,” Liu said, adding that initial shipment of the new products will begin in the first quarter next year.

Looking ahead, Liu said the company will roll out a new array of Bluetooth-enabled sound bars, which can connect to both Apple Inc’s AirPlay speaker dock and Bluetooth-enabled solar powered speaker systems next year, aiming to achieve high growth in the US and Europe.

Despite the EU’s dire economic condition, Eastern Technologies forecast double-digit profit growth next year, with improved gross margins.

In the third quarter, the company reported a net profit of NT$112 million (US$3.83 million), more than double the NT$55.84 million earned in the previous quarter and up 63.89 percent from the NT$68.34 million earned in the same quarter last year. Earnings per share in the third quarter were NT$2.07.

Gross margin was 14.29 percent in the July-to-September period and 13.42 percent in the first half of the year. Operating margin was 10.06 percent in the third quarter and 6.94 percent in the first half, the company’s financial report showed.

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