Wellypower Optronics Corp (
Wellypower plans to float 11.76 million new shares at NT$63 a share on the nation's over-the-counter Gretai Securities Market next Wednesday. The company currently has 119.51 million shares outstanding.
"We will use the proceeds to expand our production lines in Taiwan and China," said Tony Chang (
Chang told investors that Wellypower plans to spend around NT$1 billion next year on new equipment and facilities in Taiwan and Suzhou, China.
Wellypower, originally a florescent light-manufacturing joint venture between Taiwan's China Electric Mfg Corp (中國電器) and Tokyo-based Elevam Corp, now focuses on making lamps for thin-film-transistor liquid-crystal-display (TFT-LCD) panels. It has a 10-percent share of the global market.
AU Optronics Corp (
With the expansion plans, Wellypower expects monthly output to more than double to 18 million units by the end of next year, from the current 8.5 million units.
"The expansion aims to catch up to our customers' fast-growing demand for cold cathode fluorescent lamps [CCFL], mostly for LCD TV panels," said Wellypower chairman Chen Hsuen-bin (
Chen is also president of AU Optronics.
Chen said production cannot meet customers' needs and tight supply will continue next year.
Wellypower now supplies lamps to almost all of Taiwan's flat panel makers, except Chi Mei Optoelectronics Corp (
A mainstay 32-inch LCD TV panel consumes 16 lamps, compared with the four lamps a 17-inch LCD computer panel needs. Wellypower, which mainly produces lamps used in LCD computer panels, started making longer lamps for LCD TVs in October.
"We believe 2006 will be a year of explosive growth for Wellypower in light of the thriving LCD TV market," Chen said.
Wellypower said pre-tax profits doubled to NT$265 million in the first half of this year from a year ago, on higher sales of NT$2 billion. Earnings per share also rose to NT$2.05.
In light of the robust demand, Wellypower will more than double its earnings to NT$644 million this year and NT$1.23 billion next year, from NT$265 million last year, according to Honda Chou (
EPS is expected to jump to NT$5.4 this year and to NT$10.32 next year, from NT$3.04 last year, Chou said.
The upbeat outlook will boost Wellypower's stock price, he said.
“I wouldn't be surprised if the stock shoots up to NT$100 on the first
trading session,” Chou said.
Trading of Wellypower shares will not be limited by the daily 7 percent
ceiling for the first five trading sessions.
Chou rates Wellypower as “Overweight,” with a 12 month target price of
NT$130, representing 106 percent upside from the IPO price of NT$63.
Wellypower shares were trading at an average of NT$129 yesterday on the
nation's grey market.
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