Shares of the notebook computer firm Asustek Computer Inc (華碩) closed sharply higher yesterday on the first day of the resumption of its trading, reflecting investor optimism about its earnings outlook after the spinoff of its manufacturing arm, Pegatron Technology Corp (和碩), dealers said.
Asustek rose 6.89 percent to NT$240.50, with 3.09 million shares changing hands, while Pegatron gained 8.19 percent to reach NT$38.95 during its debut on the main board. The TAIEX closed up 0.1 percent at 7,589.89.
“Investors are in favor of the spinoff, as the gross margin for contract notebook computer production is on the decline amid fierce competition,” Taiwan International Securities (金鼎證券) analyst Michael Chiang said.
“With the spinoff, Asustek will now be able to put more into promoting its brand worldwide, as Acer is doing,” Chiang said.
Trading of Asustek shares was suspended in the middle of last month after it announced that it would list Pegatron on the local bourse following the spinoff.
An analyst with a regional brokerage firm said the gains posted by Pegatron reflected a low listing price of NT$36.
“There are concerns about falling gross margins. Investors want to see Pegatron come up with business diversification strategies to offset its disadvantages,” the analyst said.
He forecast that Pegatron’s gross margin would be about 5 percent, adding that he was cautious about its earnings outlook.
Pegatron CEO Jason Cheng (程建中) said that with the fading impact of the debt problems in Europe, his company had seen an increase in orders as demand recovered.
Cheng said he expected Pegatron’s sales in the second half to grow about 20 percent from the first half.
Daiwa-Cathay Capital Markets (大和證券) analyst Calvin Huang (黃文堯) said he had set a target price of NT$300 for Asustek and expected the stock to outperform the broader market.
The spinoff leaves Asustek without the financial burden of rising labor costs in China, and its operations are unlikely to be affected by a stronger yuan, Huang said.
Asustek has built itself into a strong PC brand in China and is likely to use that strength to expand there, he said.
He expected China to account for more than 25 percent of Asustek’s sales by the end of this year, compared with about 20 percent now.
UNCONVINCING: The US Congress questioned whether the company’s Chinese owners pose a national security risk and how the app might influence young users TikTok chief executive officer Shou Chew (周受資), confronted with an unforgiving, distrustful US Congress, tried to give answers in his testimony on Thursday that avoided offending either the US government or China. However, his evasiveness left Congress unsatisfied, with representatives hungrier than ever to punish TikTok for ties to its parent company ByteDance Ltd (字節跳動), based in Beijing. He did not bring his company any closer to a resolution. Politically, TikTok is in a tougher spot. Its executives had been discussing divesting from ByteDance to resolve US national security concerns, people familiar with the matter told Bloomberg. However, China this week said
The Investment Commission yesterday approved a Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) application to invest an additional US$3.5 billion in its Arizona subsidiary to manufactured advanced chips. The world’s largest contract chipmaker’s board of directors last month approved the funding project after TSMC started moving manufacturing equipment into the fab in December last year in preparation for the production of 4-nanometer chips next year. TSMC said it has also commenced the second phase of facility construction in Arizona. The second fab is to produce semiconductors using 3-nanometer technology in 2026. Altogether, TSMC plans to spend US$40 billion on the Arizona fabs, doubling its
Microsoft Corp has threatened to cut off access to its Internet search data, which it licenses to rival search engines, if they do not stop using it as the basis for their own artificial intelligence (AI) chat products, people familiar with the dispute have said. The software maker licenses the data in its Bing search index — a map of the Internet that can be quickly scanned in real time — to other companies that offer Web search, such as Apollo Global Management Inc’s Yahoo and DuckDuckGo. Last month, Microsoft integrated a cousin of ChatGPT, OpenAI’s AI-powered chat technology, into Bing. Rivals
Sanofi SA’s drug Dupixent succeeded in a late-stage trial for chronic obstructive pulmonary disease (COPD), raising the odds that the blockbuster would be the first biologic medicine cleared to treat the lung disorder. Dupixent, which is already prescribed for asthma and some skin conditions, showed a 30 percent reduction in the rate at which patients’ COPD worsened compared with those who received a placebo during the stage-three Boreas trial, the company said in a statement yesterday. The positive data could herald a new era of cutting-edge treatments for the life-threatening respiratory affliction and provide another major boost in demand for the French