Higgstec Inc (萬達光電), which makes niche touchpanels for industrial and medical devices, is slated to debut its shares at NT$25.3 each on the over-the-counter Taipei Exchange later this month.
The listing price represents a 20.74 percent discount compared with the stock’s price of NT$31.92 on the Emerging Stock Board on Friday last week.
With paid-in capital of NT$350 million (US$11.9 million), the 16-year-old company said touchpanels used in industrial devices are its biggest revenue source, accounting for 43.5 percent of the total.
The portion could fall to 40 percent this year as the company focuses on expanding sales of touchpanels for niche products, such as military and medical devices, and gambling machines.
Higgstec expects touchpanels used in niche products to make up 30 percent of revenue this year, up from 27.7 percent last year, while touchpanels for commercial devices, the transportation sector and vehicles should make up 28.8 percent.
Unlike its local peers, which focus on the mass market and have rapidly expanded capacity in China to meet orders for consumer electronics, Higgstec aims to avoid being caught a cutthroat price war by supplying tailor-made touchpanels and has managed to stay profitable, company president Fan Chih-ming (范志明) said last week.
Higgstec’s expansion efforts in Europe have also borne fruit, with the region contributing more than 30 percent to the company’s revenue and becoming its largest market, Fan said.
The company operates two factories in Taoyuan and Yilan, and Fan said it plans to invest NT$30 million to convert those into smart production lines in a bid to improve production efficiency over the next three years.
Higgstec supplies two types of touchpanels — resistive and projected capacitive touchpanels, with five-wire resistive touchpanels contributing about 60 percent of its revenue and projected capacitive touchpanels making up the remaining 40 percent.
However, the firm aims to gradually increase the contribution from projected capacitive touchpanels to 60 percent and reduce that from resistive touchpanels to 40 percent, Fan said.
Higgstec aims to increase revenue by a double-digit percentage this year from NT$1.25 billion last year and expects its profitability to stabilize this year, after foreign-exchange losses of NT$27 million took nearly 20 percent from its profits last year.
Net profit shrank 19 percent to NT$94.2 million last year, with earnings per share dropping from NT$3.28 to NT$2.69, a company financial statement filed with the Taiwan Stock Exchange said.
The company’s board of directors last month approved the distribution of a cash dividend of NT$2.6 per common share, representing a payout ratio of 96 percent.
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