Thu, Jan 17, 2013 - Page 14 News List

Panic selling of casing makers ‘overdone’: Daiwa

By Helen Ku  /  Staff reporter

Metal casing maker CaseTek Holdings Ltd’s (鎧勝控股) planned share debut on the local bourse has created selling pressures on shares of local peers, such as Catcher Technology Co (可成科技) and Foxconn Technology Co (FTC, 鴻準), but Daiwa Capital Markets viewed the panic selling as “a bit overdone.”

Casetek, a subsidiary of Pegatron Corp (和碩), is to issue 24 million new shares in its initial public offering (IPO) on Jan. 25 to raise NT$2.16 billion (US$74.39 million). The company has priced the shares at NT$90 each.

Daiwa analyst Birdy Lu (呂家霖) yesterday said CaseTek was a solid company, but it did not change the competition landscape in the industry.

“CaseTek has indeed grown faster than Catcher and FTC since 2008, as Apple tried to foster a third supplier to break the duopoly,” Lu said in a report.

However, “it is impossible that Catcher will lose production share of ‘current’ iPad Mini tablet casings to CaseTek,” Lu said, adding that the order allocation decision was already made by Apple Inc long before CaseTek’s IPO.

CaseTek has been competing with Catcher and Foxconn for three or four years. Apple accounts for 60 percent of the company’s total revenue, which is a larger share than that of Catcher, as the latter becomes more diversified.

Lu estimated Apple would contract out 30 percent of its metal casing orders to Hon Hai Group (鴻海集團), 25 percent each to Catcher and CaseTek, 15 percent to FTC and 5 percent to others. He said Apple would continue keeping Catcher as the most reliable third source, instead of concentrating orders on Hon Hai, FTC and CaseTek.

For this quarter, Lu forecast CaseTek would reach 4 percent quarter-on-quarter sales growth, thanks to Apple’s iPad Mini, HTC Corp’s (宏達電) new flagship “M7”smartphone and Research in Motion Ltd’s new BlackBerry 10.

Catcher’s shares remained flat at NT$128.5 in Taipei trading yesterday, outperforming the broader market, which fell 0.83 percent. FTC’s shares closed up 1.28 percent at NT$86.9, while Hon Hai’s shares lost 0.24 percent at NT$84.

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