Fri, Mar 14, 2014 - Page 14 News List

Yageo board approves share buyback plan to safeguard shareholders’ interest

By Kevin Chen  /  Staff reporter

Yageo Corp (國巨), the nation’s largest passive components maker, yesterday said its board has approved a plan to buy back as much as 20 million shares in the open market from today until May 13.

The size of the share buyback account equals 3.6 percent of total shares, Yageo said in a statement after the local stock market closed.

REPURCHASE

This is the company’s sixth share buyback plan since the 2008 global financial crisis. The company last bought back its shares in the period between Nov. 12 and Jan. 3, repurchasing 18 million shares on the open market.

The latest buyback proposal is likely to cost the company from NT$187 million (US$6.17 million) to NT$426 million, as Yageo plans to repurchase the shares at prices between NT$9.35 and NT$21.30 per share.

Yageo’s stock price closed 3.26 percent lower at NT$13.35 yesterday in Taipei trading. Over the past 12 months, the stock has traded between NT$9.35 and NT$15 on the market, Taiwan Stock Exchange data showed.

The company, which has seen its shares decline by 3.96 percent in the past month against the broader market’s 3.31 percent increase over the same period, said the purpose of the buyback was to “maintain the company’s credibility and safeguard shareholders’ interests.”

The repurchased shares will be canceled, Yageo said in the statement.

As of the end of September last year, Yageo had NT$5.29 billion in cash and cash equivalents, according to its balance sheet.

WORLD’S LARGEST

Yageo is the world’s largest supplier of chip resistors and the sixth-largest maker of multilayered ceramic capacitor products in the global market.

Last week, the company reported that cumulative sales for the first two months of the year rose 12.2 percent year-on-year to NT$4.21 billion, which met 67 percent of the company’s sales guidance for this quarter and exceeded analysts’ forecasts.

“We believe the company’s sales will grow steadily this year,” First Capital Management Inc (第一金證券投顧) said in a client note on Friday.

FORECASTS

With revenue contributions from handset and networking-related products considered likely to rise, along with continued growth in China’s mobile device and fourth-generation service markets, Yageo’s revenue for this quarter is forecast to increase by 8.05 percent quarter-on-quarter and 6 percent year-on-year to NT$6.29 billion, First Capital said.

Gross margin is estimated to increase 0.34 percentage points to 20.89 percent this quarter from last quarter and net profit is forecast to expand to NT$289 million, reflecting earnings per share of NT$0.19, the brokerage said.

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