As part of the government's plan to privatize the state-run Chungh-wa Telecom (
Those assets -- which include machinery, property and buildings -- were valued at between NT$365.7 billion and NT$384.7 billion, according to the results of two independent appraisals commissioned by the ministry.
This valuation is one of the factors in determining a share price for the staggered stock sale that is scheduled to begin as early as next month.
Yeh Chu-lan (葉菊蘭), head of the ministry, said that Chunghwa's liberalization plan "is currently one of the biggest issues facing the nation ... as the share release will affect not only government revenue and the development of the capital market but also the common investor and Chunghwa employees." The figures -- which did not include Chinghwa's liquid or intangible assets -- will be given to the inter-departmental pricing committee convened by the ministry to use as a reference in determining the price of Chunghwa's shares. Under the liberalization plan, the ministry will sell off 33 percent of the company in two stages -- the first beginning next month with an auction-sale of 3 percent -- before the end of the year and is expected to list on the Taiwan Stock Exchange in October.
Yeh stressed however that the value of the fixed assets would not be the only factor in determining the much speculated share price, saying that others such as "Chunghwa's long-term profitability and the share prices of similar domestic and foreign companies" would also be considered.
The two appraisals placed the value of Chunghwa's fixed assets close to their book value of NT$363 billion, showing that unlike many had speculated, the company probably has very little hidden value or losses, according to Credit Suisse First Boston telecoms analyst Jeffrey Hanson.
"What this implies is that there is probably not a lot of hidden real estate value ... which is what people thought before," said Hanson. "Because the real estate is under regulation and can openly be used for telecom purposes and therefore isn't nearly as valuable as it would be otherwise." According to analysts, the market valuation of Chunghwa may be less dependent on the balance sheet and more dependent on the operating fundamentals of the company like the number of Internet subscribers they have and the breakdown between fixed-line and mobile.
And while lawmakers have already set a floor price of NT$60 per share, industry insiders expect that the shares could possibly be worth over NT$100.
Yeh said in her report that the pricing committee would decide on a share price within two weeks.
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