Taiwan High Speed Rail Corp (THSRC, 台灣高鐵) shares soared 58.75 percent to close at NT$24.05 yesterday on the first day of their listing on the Taiwan Stock Exchange’s main board.
While the broader market suffered downward pressure, led by the bellwether electronics sector, THSRC shares were the highlight of the market due to their attractive listing price of NT$15.13, amid hopes that the company will continue to generate a stable revenue stream, dealers said.
The benchmark TAIEX fell 0.67 percent to 9,299.55 points.
Photo: CNA
Investors pushed THSRC shares above the NT$20 mark soon after the market opened and the momentum continued throughout the trading session.
“The broader market is in consolidation mode, with the high-tech sector weakening, so it was no surprise that investors wanted to park their funds in a stock like THSRC, to enjoy the honeymoon period of the new listing,” Hua Nan Securities Co (華南永昌證券) analyst Kevin Su (蘇俊宏) said. “More importantly, THSRC is a defensive stock, as it has become profitable and is generating a stable revenue stream.”
“The listing price was attractive to many investors, as the stock hit an intra-day high of NT$21.90 on the emerging market in mid-September,” Su said.
THSRC posted NT$20.05 billion (US$648 million) in sales, or earnings per share of NT$0.4, in the first half of the year.
Its average number of daily passengers rose to 153,000 this year from 43,000 in 2007. As at the end of last month, accumulated passenger numbers totaled 389 million.
THSRC began a financial restructuring last year in a bid to become profitable. The company cut its paid-in capital by 60 percent, or NT$39.1 billion, to make up its losses, and then raised its paid-in capital by NT$30 billion, with the government’s stake in the company rising to 63.9 percent from 22.1 percent.
Due to the financial restructuring, the Ministry of Transportation and Communications agreed to extend the firm’s concession period from 35 to 70, which has laid the foundations for the company to start making a profit.
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