Epistar Corp (晶元光電) shares yesterday plunged 5.31 percent to NT$22.3 with more than 100 million changing hands on the local bourse, as investors reacted to the company’s removal from the MSCI global equity indices.
Global index provider MSCI Inc on Nov. 13 lowered Taiwan’s weightings in three of its indices, marking the ninth consecutive quarter in which the nation’s weightings have been cut.
Epistar was removed from the MSCI World Index and was added to the MSCI World Small Cap Index, which took effect after the trading session ended yesterday.
Epistar, the world’s largest LED chipmaker, has suffered from severe price competition from its rivals, with its shares plummeting 62.56 percent since the beginning of this year.
Last quarter, the company reported a net loss of NT$1.19 billion (US$36.245 million), or a loss per share of NT$0.96, compared with a net income of NT$1.82 billion recorded a year earlier.
On a quarterly basis, the net loss expanded from NT$99.06 million in the second quarter.
The LED chipmaker booked an inventory loss of NT$1.24 billion last quarter, mainly due to a low product utilization rate and falling prices of LED lighting products.
CTBC Securities Investment Service Co (中國信託證券投顧) said it forecast Epistar’s sales fall 4.7 percent quarterly to NT$5.88 billion this quarter due to cheap average selling prices for LED chips.
“Epistar’s scale of net loss might narrow sequentially, but we do not foresee a rebound of demand for LED chips in the next two quarters. We hold a pessimistic view about Epistar’s outlook next year,” CTBC said in a note released on Thursday.
Epistar’s revenues totaled NT$21.53 billion in the first 10 months of this year, representing an annual decline of 9.93 percent from NT$23.91 billion recorded in the same period last year.
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