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.
GlaxoSmithKline (GSK) in July made its consumer health products division a separate entity as it transforms into a world-leading biopharmaceutical company. By uniting science, technology and talent, the company is aiming to prevent and treat diseases with innovative vaccines, specialty pharmaceuticals and general medicines. GSK’s headquarters annually invests NT$192 billion (US$6.07 billion) in research and development, focusing on immune science and advanced technologies in human genetics. GSK’s drug and vaccine development focuses on infectious diseases, HIV, oncology and immunology. Investing in clinical trial research each year, GSK also brings drug development to Taiwan. It cooperates with 17 medical institutes and research
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