Boosted by speculation of a possible Chinese merger, Taiwan’s largest handset retailer, Senao International Co (神腦國際), saw its shares soar by the daily limit yesterday.
Senao’s shares closed up 7 percent to NT$50.6 (US$1.5) on the Taiwan Stock Exchange, while parent Chunghwa Telecom Co (中華電信), the nation’s top telecommunications service provider, remained unchanged at NT$58.4.
Senao International is 40.8 percent owned by Chunghwa Telecom.
Chinese-language media yesterday reported that Senao was set to join hands with Chunghwa Telecom and merge with a handset communications retailer in China within the first half of the year.
Both companies refused to confirm details of the merger.
Senao said in a filing to the Taiwan Stock Exchange yesterday that it was studying the feasibility of moving into the Chinese market, but it had yet to sign a memorandum of understanding (MOU) with its potential partner.
“Our goals are to continue developing new product offerings and exploring new markets ... Expansion into China is still under evaluation,” Senao said.
Chunghwa Telecom said in a separate filing that it had no comment to make on market speculation. The company said it would make its plans, if any, public in accordance with regulations.
The Chinese-language Commercial Times reported that the merger target was a top-three communications retailer in China and that it has a network of almost 1,000 outlets.
The report, which didn’t disclose where the information was obtained from, said the Chinese firm had recently sent officials to Taiwan and had signed the confidentiality clause of an MOU with Senao and Chunghwa Telecom.
While the merger structure has not been finalized, the deal is expected to amount to a few billion NT dollars, the report said.
Currently, major handset retailers in China include D.Phone Mobile (迪信通), FunTalk (樂語), China Ptac Communications Services (中郵普泰) and Pypo (派普). The report specifically singled out FunTalk, saying the enterprise has grown in strength in recent years by merging with seven other domestic competitors and that it listed on NASDAQ last month.
Senao chairman Paul Lin (林保雍) told reporters on Sunday that the company had a few merger targets in China and it hoped to make a foray into the market in the first half of the year.
He declined to reveal the company’s name, but said Senao had commissioned an accountancy firm to evaluate the possible merger.
Senao has 217 outlets in Taiwan and it plans to expand to about 350 outlets. The company — which saw its revenues shrink 16 percent to NT$18.5 billion last year — is targeting selling 3.5 million handsets in Taiwan this year, up from 3.2 million last year.
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