Passive components supplier Walsin Technology Corp (華新科技) yesterday saw its share price soar 9.76 percent, boosted by strong earnings results and a new share buyback plan.
Shares of Walsin Technology rallied to NT$157.50, outperforming the TAIEX, which inched up 0.63 percent, while shares of bigger rival Yageo Corp (國巨) slid 0.43 percent to NT$345.50.
Walsin Technology’s net profit more than doubled to NT$9.16 billion (US$298 million) last quarter from NT$4.37 billion in the second quarter, as a persistent supply crunch propelled prices amid an upcycle rarely seen in the industry’s history, the company said in a statement on Thursday.
Gross margin hit a record 70.7 percent last quarter from 56.7 percent in the previous quarter.
In the first three quarters, the Taipei-based supplier of chip resistors and multilayer-ceramic capacitors (MLCC) saw net profit surge to NT$14.84 billion, from NT$7.42 billion in the same period last year.
Earnings per share ballooned to NT$30.69 from NT$15.27.
Net profit in the first three quarters was three times more than Walsin Technology’s share capital of NT$4.86 billion.
The company’s board of directors on Thursday approved a share repurchase plan of NT$14.1 billion, with the company buying back shares at NT$140 to NT$200 apiece from yesterday to Dec. 28, Walsin Technology said in a filing with the Taiwan Stock Exchange.
The stock has corrected by 66 percent since peaking this year at NT$458.50 on July 2, reflecting growing concern among investors about changes in market dynamics.
Yageo also benefited from booming demand for MLCCs and reported a spike in net profit to NT14.5 billion last quarter, from NT$10.8 billion in the second quarter, while gross margin surged to 69.3 percent from 64.1 percent, the company said on Wednesday.
In the first three quarters, net profit skyrocketed to NT$29.56 billion from NT$3.83 billion in the same period last year.
Earnings per share climbed to NT$70.29 from NT$8.07.
However, Yageo warned that this quarter would be a slow season, as its distributors’ inventories have risen above normal levels because demand from Chinese clients has been affected by the US-China trade dispute.
“Yageo is taking proactive measures to help distributors reduce inventories to a healthy level,” the company said.
To cope with the headwinds, Yageo said it is optimizing its product portfolio and increasing production of resistors for cars and industrial devices.
The company said that it is gaining more market share, as Japanese rivals are exiting those markets.
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