Walsin Lihwa Corp’s (華新麗華) shares yesterday jumped by the daily maximum, after the stainless steel manufacturer said it would book a net disposal gain of US$230 million from selling a US solar business, which would boost its already robust earnings.
The gain could add NT$2.48 in earnings per share to the company’s net profit next quarter, based on its capital shares totaling 3.4 billion.
Walsin makes stainless steel, power cables and a wide range of commodities, including nickel pig iron in Indonesia. It has benefited from a boom in commodities.
Photo: CNA
Shares in Walsin jumped 9.95 percent to NT$44.2 yesterday — their highest since April 29, when the stock closed at NT$44.8.
Turnover spiked 43.36 percent to 205.43 million shares yesterday from 142.68 million shares on Tuesday, Taiwan Stock Exchange data showed.
“The company’s board has decided to dispose of the US solar energy development department, spun off from Borrego Solar Development Inc, to ECP Management LP. ECP is a US renewable energy investment company with more than 20 years in related experience,” Walsin chief of staff and deputy spokeswoman Sophi Pan (潘思如) told a news conference at the Taiwan Stock Exchange on Tuesday.
The deal would help Walsin leverage ECP’s capability of developing green energy across different regions of the world and accelerate Walsin’s green energy business expansion, Pan said.
The transaction totaled US$567 million, she said.
Walsin’s board of directors also approved a proposal to inject as much as US$33 million new capital into Borrego, with the aim of enhancing the solar energy subsidiary’s design abilities and to fund raw material purchases, maintenance services and the construction of solar power systems, Pan said.
Borrego, 72.59 percent owned by Walsin, made a net profit of about US$20 million last year on revenue of US$600 million, Walsin said.
Walsin expects the green energy business to contribute more to the company’s overall revenue.
Walsin said it made inroads into the renewable market in 2008 by investing in Borrego.
Walsin posted net profit of NT$3.83 billion (US$139.58 million) in the first quarter, more than double the NT$1.88 billion it made in the same period last year. Earnings per share rose to NT$1.12, from NT$0.55 a year earlier.
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