Giga Solar Materials Corp (碩禾電子), a photovoltaic (PV) conductive paste maker, saw its shares jumped 32.2 percent from their initial public offering (IPO) price on their first trading day yesterday, outperforming other solar-related shares and the over-the-counter market index, which went down 0.13 percent.
The Hsinchu-based company opened at NT$685 on its debut on the GRETAI Securities Market, surging from its IPO price of NT$500. The stock ended at NT$661 per share after pulling back from an intraday high of NT$698, GRETAI data showed.
With its closing price of NT$661, Giga Solar surpassed Largan Precision Co (大立光), the nation’s leading maker of -handset lenses, to become the second highest-priced stock on the local bourse, second only to HTC Corp (宏達電), the world’s leading maker of smartphones running on Windows Mobile and Android platforms.
Largan closed 0.17 percent lower at NT$605, while HTC ended 1.65 percent higher at NT$803 on the Taiwan Stock Exchange yesterday.
Giga Solar was originally a materials chemical department of local optical disc maker Gigastorage Corp (國碩科技), and focused mainly on conductive pastes for solar cells such as silver paste, -silver--aluminum paste and aluminum paste in close collaboration with the non-profit Industrial Technology Research Institute (ITRI, 工研院).
In 2007, the department -developed aluminum paste, a key material used in crystalline--silicon based solar cell production, which was viewed by the industry of high efficiency in the conversion of solar cells and accounted for about 10 percent of production costs.
In 2008, Gigastorage decided to spin off the department. It established Giga Solar in November that year, hoping the newly formed entity would secure a niche position in the global PV supply chain amid the fast rising green energy market, according to information posted on Giga Solar’s Web site.
“We see Giga Solar as well-positioned in a niche market in the global PV supply chain because it is the sole active conductive paste manufacturer in Taiwan producing aluminum paste,” Primasia -Securities Co (犇亞證券) said in a client note yesterday.
The brokerage said Giga Solar has successfully tapped into the aluminum paste markets in Taiwan, China and Europe. Overall, the company’s global market share has grown to about 20 percent this year from 10.5 percent last year, mainly backed by increasing production from Taiwanese and Chinese cell makers, Primasia said.
Giga Solar reported a net income of NT$728 million (US$24 million) in the first nine months of the year, or NT$23.94 in earnings per share (EPS), on a revenue of NT$1.75 billion. That compared with a net income of NT$136 million, or NT$5.89 in EPS, and revenue of NT$430 million, a year earlier.
Despite a strong debut of the PV conductive paste maker, other solar-related stocks did not fare well amid portfolio adjustments and cautious outlook for the sector globally.
Shares of Motech Industries Inc (茂迪), the nation’s biggest solar cell maker, were down 4.13 percent to NT$116 and Sino--American Silicon Products Inc (中美晶), Taiwan’s top maker of wafers for solar cells, dropped 5.1 percent at NT$96.8.
E-ton Solar Tech Co (益通光能) — which saw its shares soar by 299.54 percent on its debut on the GRETAI market on March 8, 2006, to NT$871 from the IPO price of NT$218 per share — fell 2.31 percent to NT$38.1 yesterday.
“We believe a downward pricing trend across the entire PV supply chain may persist next year due to continuous cost-cutting efforts and a cautious sector outlook,” Primasia said in its note
Other headwinds such as rising raw material costs for products such as silver powder and falling average sales prices could be a challenge for the company to maintain its high margins in the long-term, the brokerage said.
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