Mon, Mar 31, 2014 - Page 14 News List

Hiwin reveals cash, stock payout plans

RISING TIDES:An investment banking group has upgraded the firm’s status to ‘buy’ and raised its target price to NT$385 on the back of rising European demand

By Camaron Kao  /  Staff reporter

Hiwin Technologies Corp (上銀科技), which makes machine tools like ballscrews and linear guideways, on Friday last week said that its board had approved a plan to distribute a cash dividend of NT$2.7 and a stock dividend of 3 percent per share this year.

The dividend plan is based on the company’s earnings last year of NT$2.02 billion (US$66.29 million), or NT$7.96 per share, according to the company’s filing to the Taiwan Stock Exchange.

Earnings last year were 0.5 percent higher than the NT$2.01 billion, or NT$7.91 per share, it made in 2012, the filing showed.

The proposed cash dividend translates into a payout ratio of 33.92 percent, which is slightly lower than the 34.13 percent a year ago, and a dividend yield of 0.95 percent, based on its share price of NT$283 on Friday.

The plan still has to be approved at the company’s annual shareholders’ meeting, which is scheduled for June 27.

Hiwin posted a revenue of NT$12.44 billion last year, up 0.57 percent from NT$12.37 billion a year ago, the filing said.

Daiwa Capital Markets on Wednesday upgraded Hiwin to “buy” from “outperform” and raised its target price for the company to NT$385 from NT$300, citing its strong outlook on the back of the improvement in the purchasing managers’ index in Europe since October last year.

“Our research on Taiwanese machine-tool makers shows strong growth momentum in sales of machine tools in Europe. This is especially important for Hiwin, in our view, as Europe accounts for a high proportion, or about 25 percent, of the firm’s total sales,” Daiwa analysts Christine Wang (王琦清) and John Lai said in a report.

Wang and Lai added that they expected the demand recovery in Europe to be sustainable.

Hiwin is likely to post a revenue of NT$15.87 billion and profit of NT$3.05 billion this year, Daiwa said.

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