Taiwan Taxi share price surges on GRETAI debut

DRIVING FORCE::Despite a significant price rise during first day trading, an analyst said investors are cautious about the company’s long-term market prospects

By Amy Su  /  Staff reporter

Thu, Nov 08, 2012 - Page 14

Taiwan Taxi Co (台灣大車隊), the nation’s largest cab service provider, yesterday saw its shares jump 12.92 percent on its debut on the GRETAI Securities Market.

The stock closed at NT$81.3, soaring by NT$9.3 from its listing price of NT$72 and outperforming the GRETAI’s 1.146 percent rise, stock exchange data showed.

The company’s shares at one point climbed to NT$86.8 — a 20.5 percent rise from the listing price — in the morning session, with the rising trend curtailed with the stock finally closing at NT$81.3, its lowest price yesterday.

Under the stock exchange’s regulations, a newly listed stock is not subject to the 7 percent maximum daily increase or decline during its first five trading sessions.

“The issue price was high, so the stock faced some technical hurdles on the first trading day,” Grand Cathay Securities (大華證券) analyst Mars Hsu (徐振家) said.

“For a newly listed stock, Taiwan Taxi did not enjoy a very sweet honeymoon with investors, who had concerns over competition in the taxi service market,” Hsu said.

Before the GRETAI listing, Taiwan Taxi had been listed on the smaller Emerging Stock Market — a preparatory board for Taiwan’s two main bourses — since July 25 last year.

Yesterday, Taiwan Taxi chairman Lin Tsun-tien (林村田) maintained an upbeat outlook for the fourth quarter on the back of steady revenue contributions from advertisements.

During the company’s debut ceremony at the over-the-counter market, Lin said that strong sentiment in the tourism sector would continue to drive up the company’s revenue and profitability.

The company has seen an increasing number of tourists willing to use cabs on a daily basis to visit various tourism attractions in Taiwan, Lin said.

Lin said the company, which controls a 14 percent share of the market with 12,000 cabs operating mostly in the Greater Taipei area, will continue its expansion by increasing by 1,000 to 2,000 new cabs per year in the future.

Taiwan Taxi posted NT$109 million (US$3.73 million) in net income for the first nine months of the year, translating into earnings per share of NT$3.3, a record-high period of profitability in the company’s history, company financial data showed.

Grand Cathay forecast the company to report NT$3.6 in earnings per share for this year and between NT$4 and NT$4.5 for next year.

Additional reporting by CNA