Printed circuit board (PCB) maker HannStar Board Corp’s (瀚宇博德) decision to acquire a 24 percent stake in local peer Career Technology Co (嘉聯益) would positively affect its efforts to develop 5G-related products, Jih Sun Securities Investment Consulting Co (日盛投顧) said on Wednesday last week.
HannStar Board produces mostly rigid PCBs for PCs, Internet communications, set-top boxes, TVs, servers and gaming devices, but the company has less access in the market for handheld devices, such as mobile phones and tablets, Jih Sun said in a note.
“Its cooperation with Career Technology would help it broaden its market and expand PCB production from rigid boards to flexible boards, as well as helping the company in the development of 5G-related products amid a rapidly growing 5G market,” Jih Sun analyst Daniel Tsai (蔡志昇) said in the note.
The agreement with HannStar Board would help Career Technology, which is a major supplier of flexible PCBs for Apple Inc, to obtain the stable funding needed to develop its 5G business long-term, Tsai added.
“The cooperation would create a certain synergy between them,” he said.
The analyst’s remarks came the day after the companies announced their strategic move, which would see HannStar Board acquire a 24 percent stake in Career Technology through a private placement and a share swap, while Career Technology would acquire a 6.5 percent stake in HannStar Board.
Under the plan, HannStar Board would first acquire a 16 percent share in Career Technology at NT$28 per share via a private placement, and then swap shares with Career Technology at a 1-to-1.36 exchange ratio until it holds an 8 percent stake in its peer.
The private placement should be completed next month, while the share swap is subject to regulatory approval, company filings with the Taiwan Stock Exchange said.
HannStar Board shares on Friday closed at NT$36.1 in Taipei trading, down 5 percent from a week earlier, while Career Technology shares ended at NT$29.25, a decline of 14.47 percent from a week earlier.
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