The two Taiwanese TFT-LCD panels makers listing on the local bourse next week are taking widely diverging routes to market: One plans to list at a price high above its value on the grey market, while the other plans to list at a price far below.
"[Our share price] will fall for the first two or three days, down to a level investors deem more reasonable," said an executive from Chi Mei Optoelectronics Corp (奇美光電), the nation's second-largest maker of TFT-LCD panels.
The company plans to flog its shares for NT$63 each in a sale set for Monday, despite the fact its shares ended yesterday at just NT$44.90 on Taiwan's Emerging Market for IPOs.
The 28.7 percent difference in price means the shares will likely plummet each of their first three or four days of trading.
Competitor Chunghwa Picture Tubes Ltd (
Chi Mei plans to maintain its price and earlier this week sold NT$1.26 billion (US$37 million) worth of shares to domestic investors at NT$63 per share. Analysts say mom and pop investors should wait until the market settles on a fair price -- closer to the NT$44.90 level listed on the emerging share market -- before buying in.
Chi Mei, like other TFT-LCD makers in Taiwan, is listing shares in order to raise funds for new plants and equipment.
The race is on to build an advanced panel facility and catch demand early -- before too many plants come online and produce a glut in the market, driving down the price per panel.
These plants are more cost effective because they make larger sheets of the glass from which TFT-LCD panels are cut. It costs around NT$35 billion (US$1.03 billion) for LCD makers to build a 5th generation flat-panel plant.
AU Optronics Corp (
But times have changed as the US economy stumbles again. An under-supply of TFT-LCD panels earlier this year has turned into a glut.
Shares of AU have plummeted 56 percent from a high of NT$60.50 per share this year to yesterday's closing price of NT$26.70. It turns out that AU was lucky to list when it did.
"If [companies] can't raise money on the stock market, then they can't go ahead with plans. It all depends on the market situation," said Charles Yang (
Quanta Display Inc (
"These shares are being sold for shareholders, not for [the company]," said Sam Huang, a manager at Quanta Display.
To finance its advanced, 5th generation LCD plant, the firm has received a cash injection of NT$5.1 billion (US$173.4 million) and plans to seek a syndicated loan of NT$15 billion (US$510 million) to be completed by the end of the third quarter.
The majority shareholder of Quanta Display is Taiwan's No. 1 notebook computer maker, Quanta Computer Inc (
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