Shares of China-based metal casing maker soar on TWSE debut

The strong showing vaulted the stock to become the highest-priced metal housing supplier on the local bourse after Casetek replaced rival Catcher Technology Co. to get the title, they said.

Shares of Casetek gained 52.20 percent from its issue price of NT$90 to close at NT$137.00 with 16.34 million shares changing hands, while the benchmark weighted index on the TWSE ended down 0.30 percent at 7,672.58 points.

Shares of Catcher Technology closed up 0.40 percent at NT$127.00.

According to the local securities listing rules, a newly listed stock is allowed to move beyond the 7-percent upward or downward limits in the first five trading sessions into the listing.

“The issue price made Casetek shares look cheap based on its earnings prospects, which triggered strong buying soon after the local bourse opened,” Grand Cathay Securities analyst Mars Hsu said.

Hsu said there are wide market expectations that the casing supplier report of NT$10 in earnings per share (EPS) for 2012 is expected to rise further to NT$12-NT$13 in 2013.

In the first three quarters of this year, Casetek posted NT$1.88 billion in net profit, or NT$6.85 per share, compared with NT$0.47 in EPS recorded for the whole of 2011.

For the primary listing, Casetek issued 24 million new shares to raise NT$2.16 billion as working capital for future expansion.

The company operates production facilities in China's Shanghai and Suzhou, making casings for tablet and notebook computers. More than 76 percent of its production is consumed in the China market.

Its major buyers include Apple Inc., Lenovo Group, Samsung Electronics Co., Sony Corp., Hewlett-Packard Co., Acer Inc. and Asustek Computer Inc. Apple serves as Casetek's largest customer, accounting for about 90 percent of its total sales.

While the market has been disappointed by Apple's latest quarterly results amid concerns over slower demand for iPhones, Hsu said that as Casetek provides housings for the iPad mini and Macbook rather than the iPhone, concerns over Apple's sales did not affect the stock throughout the session.

Contract notebook computer maker Pegatron Corp. is the largest shareholder of Casetek and owns an almost 70 percent stake in the casing supplier.

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