Shares in Far Eastern Department Stores Co (FEDS, 遠東百貨) and other firms in the Far Eastern Group (遠東集團) rose yesterday after the Taipei High Administrative Court on Thursday ruled in favor of the retailer’s control of Pacific Sogo Department Stores Co (太平洋崇光百貨).
Aspects of Far Eastern Group’s stock portfolios, especially Far Eastern Department Stores, may see an upside push after the removal of uncertainty over ownership of the Sogo arm, analysts said.
However, the swing factors is whether the Ministry of Economic Affairs will appeal the case as well as the potential overhang on the group’s core and non-core business outlook next year, they added.
“The court’s decision effectively marks the beginning of the end of this decade-long Sogo ownership debacle,” Primasia Securities Co analyst Kai Chen said yesterday.
In Taipei trading yesterday, Far Eastern Department Stores closed up 5.04 percent at NT$30.20. The stock has declined 15.41 percent so far this year, compared with an increase of 7.18 percent on the benchmark TAIEX over the period, according to Taiwan Stock Exchange data.
Far Eastern Group secured control of Pacific Distribution Investment Co (太平洋流通) — a holding company for Sogo — in September 2002, which enabled it to run the Sogo chain of department stores in Taiwan and the Pacific Department Store group in China.
However, since then the Far Eastern Group has engaged a long legal battle with former Sogo owner Pacific Construction Co (太平洋建設) over Sogo’s ownership. In the intervening period, Pacific Distribution has also become involved in a dispute with the group over whether the group has legal “management rights” to Sogo, or is merely “a shareholder” in the company.
On Thursday, the Taipei High Administrative Court issued its ruling that the NT$4 billion capital injection undertaken by Far Eastern Department Stores and 14 other Far Eastern Group affiliates in 2002 to Pacific Distribution is legitimate.
The long-awaited court decision grants full legal authority to Far Eastern Department Stores as the largest shareholder of Sogo, overruling the Ministry of Economic Affairs’ previous injunction against the company after the ministry’s Department of Commerce revoked the capital injection in 2010.
Department of Commerce Director-General Reed Yu (游瑞德) said yesterday the agency would review the ruling after receiving the documents and determine if it would file another appeal.
While the verdict would favor Far Eastern Department Stores in the short term, JPMorgan Securities (Taiwan) Ltd analyst Caren Huang said in a report on Thursday that she remained cautious on the retailer’s fundamentals next year, because domestic consumption still shows no signs of recovery amid economic uncertainties.
Grand Cathay Investment Services Corp (大華投顧) analyst Horatio Lin (林修平) also expressed concerns about falling sales in Sogo’s three major branches in Taipei in recent anniversary promotional sales.
The same-store sales of Sogo branches in Zhongxiao, Fuxing and Dunnan in this year’s anniversary activities totaled NT$5.2 billion, lower than the company’s targeted sales of NT$5.4 billion and lower than last year’s NT$5.3 billion, Lin said in a note yesterday.
Meanwhile, shares in other Far Eastern Group subsidiaries also moved up yesterday in tandem with Far Eastern Department Stores, with Far EasTone Telecommunications (遠傳電信) moving up 1.11 percent to NT$72.8, Asia Cement Corp (亞洲水泥) rising 1.36 percent to NT$37.35, U-Mine Marine Transport Corp (裕民航運) gaining 1.53 percent to NT$46.35 and Far Eastern International Bank (遠東商銀) ending 2.27 percent higher at NT$11.25.
Textile manufacturer Far Eastern New Century Corp (遠東新世紀), which is a flagship company of the diversified business conglomerate, advanced 2.67 percent to NT$34.55 yesterday. Shares have fallen 1.71 percent so far this year.
Fubon Securities Investment Services Co (富邦投顧) analyst Kerry Wu (吳致勤) said the government’s tighter housing restrictions and a purified terephthalic acid (PTA) supply glut will continue to undermine Far Eastern New Century’s operations next year.
In addition, non-core gains from Sogo only make up a 2 percent of the textile firm’s net asset value, representing a meager contribution to consolidated sales, he added.
Additional reporting by Helen Ku
DEVELOPING TALENT: The electronics contractor is looking to recruit people to work in core tech fields and emerging industries like electric cars and robotics Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract electronics maker, has launched a recruitment drive, offering a monthly salary of no less than NT$45,000 (US$1,485) to university graduates. For those with a master’s degree, the starting pay would be NT$52,000 per month at the minimum, while doctorate degree holders would receive at least NT$60,000 a month, Hon Hai said a statement issued early this week. The latest recruitment drive is aimed at attracting talent in core technology fields — artificial intelligence, semiconductors and next-generation mobile communications — and emerging industries — electric vehicles, digital healthcare and robotics, the
MRT TRAVEL FALLS: In February, ridership on the Taipei MRT System fell 8.96 percent from an average of 2.01 million per day in January Scooter sales jumped 13 percent last month as more commuters turned to two-wheelers to avoid public transportation amid the COVID-19 pandemic, the latest statistics showed. Sales expanded to 74,493 units last month, compared with 65,913 units in February, statistics released on Wednesday by Kwang Yang Motor Co (光陽工業) and the Ministry of Transportation and Communications showed. In the first quarter, aggregate sales slid 0.51 percent year-over-year to 186,627 units, from 187,580 units, data showed. Kwang Yang, the nation’s biggest scooter manufacturer, continued to lead the market by selling 24,136 vehicles last month, growing 6.12 percent from 20,785 units in the previous month, while
Asustek Computer Inc (華碩), the nation’s leading PC vendor, yesterday launched its first dual-screen gaming laptop powered by Intel Corp’s latest central processing units (CPUs). The PC manufacturer’s announcement closely followed the US chipmaker’s unveiling of its 10th Generation Core H-series, the fastest commercial mobile processors with speeds of up to 5 gigahertz. Although Asustek’s Zephyrus Duo 15, the highlight of its Republic of Gamers line, is not the company’s first laptop with two screens, it is its first designed specifically for gaming. Nestled between the primary display panel and the keyboard, the secondary display, which Asustek calls the ScreenPad Plus, is angled
NO ILL EFFECT: Last month’s data mainly reflected deals made in February, when the spread of COVID-19 was still relatively mild in Taiwan, housing brokers said Housing transactions in the six special municipalities totaled 19,824 units last month, up 7.8 percent from a year earlier, brokers said, citing government data. Last month’s data mainly reflected deals made in February, when the pinch of the COVID-19 pandemic was not yet evident, they said. Taoyuan posted the largest improvement, with housing transactions soaring 36.6 percent year-on-year to 3,676 units, local government data showed. Taiwan Realty Co (台灣房屋) attributed the pickup to the completion of two presale residential projects in the municipality. Houses in Taoyuan have increasingly gained in popularity in the past few year years due to relatively affordable home prices and