Nova Technology Corp (朋億) yesterday saw its shares soar by as much as 38.52 percent during its debut, as investors bought into the company’s bullish outlook that a high demand for specialized piping systems from China would bring revenue to another record high next year.
The stock price of Nova rocketed 33.7 percent to close at NT$180.5 on the Taipei Exchange, retreating from NT$187 in the early morning session.
With more than NT$19.85 billion (US$665 million) in funds frozen following a massive oversubscription, Nova shares were priced at NT$135 for its initial public offering.
Headquartered in Hsinchu County’s Jhubei City (竹北), Nova supplies sophisticated water, gas and chemical piping systems primarily for LCD panel and semiconductor factories.
China is the company’s biggest revenue source, contributing about 65 percent of the company’s total revenue of NT$617 million last month, Nova said in a statement.
With last month’s revenue from China growing 24 percent year-on-year, it represents a significant growth market for the company, Nova said.
“This shows there is solid demand in China, as semiconductor and LCD panel companies there are ramping up new factories,” the statement said.
Nova expects the growth momentum to carry into next year, it said, adding that rapid capacity expansion in China would be a boon for the company.
“Our order visibility is very clear next year,” Nova said. “Based on customers’ orders, we expect revenue growth momentum next year will be even stronger than this year.”
As the Chinese government steps up subsidies to the semiconductor and LCD panel sectors, Chinese manufacturers are expected to increase equipment spending and to speed up factory construction, Nova said.
About 80 percent of its new orders have come from Chinese semiconductor and LCD panel companies, the company said.
Nova counts China’s biggest chipmaker, Semiconductor Manufacturing International Corp (中芯), and its leading flat-panel makers, China Star Optoelectronics Technology Co (華星光電) and China Electronics Panda Crystal Technology Corp (中電熊貓), among its customers.
Over the next three years, China plans to ramp up six 10.5-generation LCD production lines, which would produce huge glass substrates for large-sized TV panels, according to a report released by market researcher TrendForce Corp (集邦科技) on Sept. 4.
The capacity expansion would help China secure 48.3 percent of the market share and become the world’s biggest LCD TV panel supplier, surpassing South Korea’s market position by 2020, TrendForce forecast.
Demand for Nova’s new organic solvent reclaimer is increasing as the Chinese government tightens regulations on all kinds of factory pollution, including water pollution and toxic waste, it said.
Nova’s net profit in the first three quarters of this year grew 34 percent at NT$299 million, compared with NT$224 million during the same period last year. Earnings per share rose to NT$10.10 from NT$8.39.
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