Tue, May 01, 2018 - Page 12 News List

Chin-Poon shares plummet after factory inferno

EXTENSIVE DAMAGE:The Taoyuan City Government has ordered the company to halt production at the factory in Pingjhen District and levied fines totaling NT$3.1 million

By Ted Chen  /  Staff reporter

Chin-Poon Industrial Co (敬鵬工業) shares yesterday plunged by the daily limit of 10 percent on the Taipei Exchange after a fire on Saturday ripped through the company’s factory in Taoyuan, killing seven people.

The shares tumbled to NT$39.15, their lowest since July 2015, with sale orders for 13.07 million shares remaining open at the closing bell, while the broader market gained 0.99 percent.

Due to the severity of the fire, the Taoyuan City Government has ordered the company to halt production at the factory in the city’s Pingjhen District (平鎮), and levied fines totaling NT$3.1 million (US$104,712) for breaching workplace safety and pollution regulations.

Chin-Poon, the nation’s biggest automotive printed circuit board (PCB) supplier, on Sunday said the fire caused extensive damage to its P2 and P3 production facilities, but did not damage two remaining facilities.

The damaged facilities contributed about 15 percent, or NT$300 million, of the company’s monthly revenue, and have a book value of NT$900 million, and the firm is insured for NT$1.3 billion, Chin-Poon spokesman Hsiao Kung-yen (蕭公彥) told a news conference at the Taiwan Stock Exchange.

Hsiao said that while the company has instructed its production bases in Thailand and China to make up for the shortfall, it would be able to recover only half of the lost output.

He said that it would take one to two months to assess the damage.

It would take six months to resume production if only the machinery is to be replaced, but it could take up to 18 months if the facilities have to be rebuilt, Hsiao said.

However, due to stringent requirements from automotive clients, it could take between another six to 18 months for the company to regain the required certifications after repairing the facilities.

In light of mounting concerns about production disruptions at Chin-Poon, shares of rival PCB supplier Tripod Technology Corp (健鼎科技) rose 6.1 percent to NT$89.9 as investors took positions to take advantage of a shift in client orders.

Chin-Poon reported that net income last year fell 39.69 percent annually to NT$1.5 billion from NT$2.49 billion in 2016 due to competition from Chinese rivals.

Earnings per share also fell to NT$3.78 from NT$6.21 over the period, it said.

Sales dropped 1.21 percent annually to NT$23.65 billion from NT$23.94 billion in 2016, the company said.

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