Shares of integrated signal connector maker UDE Corp (湧德) closed 39 percent above their initial public offering price (IPO) on the first trading day yesterday, outperforming the over-the-counter market index’s 0.21 percent decline.
UDE opened at NT$67 on its debut on the GRETAI Securities Market, 34 percent higher than its IPO price of NT$50. The stock ended at NT$69.5 after pulling back from an intraday high of NT$69.8.
Before joining the GRETAI Securities Market, UDE shares were traded on the smaller Emerging Stock Market at an average price of about NT$67.5 per share.
Established in March 2005, UDE provides network connectors for telecommunications, data communications and computers, according to information posted on the Taoyuan-based company’s Web site. It is also a leading global supplier of products such as the Magnetic RJ45 jack and the ESD RJ45 connector.
Grand Cathay Investment Services Corp (大華投顧) analyst Eric Chang (張中宜) said that UDE enjoyed a niche market with not much competition, because the integrated network connector business requires makers to have integrated mechanical electronic systems as well as customer-made solutions.
“That represents a tough entry barrier for new market entrants,” Chang said in a client note.
UDE’s major competitors include Taiwan’s Hon Hai Precision Industry Co (鴻海), Japan’s TDK Corp, as well as Tyco Electronics Co and Molex Inc of the US, he said.
The company reported record revenue of NT$1.04 billion in the third quarter, up 17.32 percent from a year earlier and 5.57 percent higher than the previous quarter. Sales from its products for information technology, communications and consumer electronics accounted for 36 percent, 33 percent and 31 percent of the total respectively, the company’s data showed.
Sean Ryan Hsiao (蕭文良), an analyst at Fubon Securities Investment Services Co (富邦投顧), said he expected the company’s revenue to drop 2 percent in the fourth quarter from the third quarter, with earnings per share (EPS) falling to NT$1.4 from NT$1.48 amid the low season.
For the whole of this year, revenue is likely to grow 12 percent to NT$3.9 billion from last year, with EPS of NT$5.84, up 12 percent year-on-year, Hsiao said in a separate note yesterday.
“As we expect sales from the server and smart TV markets to be robust next year, and considering UDE’s economies of scale in the global integrated RJ45 market, next year’s sales and profit are likely to grow about 10 percent year-on-year,” he said.