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MediaTek shares rise nearly 7 percent, close at NT$505

TAIPEI, Taiwan -- Boosted by better-than-expected first-quarter results, shares of integrated circuit designer MediaTek Inc. (聯發科) moved nearly 7 percent higher Friday and closed at a four-year high of NT$505.

With demand for smartphones chips remaining strong, many investors have high hopes that MediaTek will continue to ride the uptrend and post a significant increase in net profit for 2014, dealers said.

MediaTek Q1 Profit Up 17.7% to NT$10.14 bil.

At an investor conference Wednesday, MediaTek reported NT$10.14 billion in net profit for the first quarter of the year, up 17.7 percent from the previous quarter and 171.4 percent year-on-year.

Its earnings per share (EPS) for the first quarter stood at NT$6.82, compared with NT$2.79 in the same period last year and NT$6.43 in the fourth quarter. The local market was closed for a public holiday Thursday.

As of yesterday, shares of MediaTek had risen by the maximum daily 7 percent to NT$505.00, with 20.94 million shares changing hands. The weighted index on the Taiwan Stock Exchange ended up 75.88 points, or 0.86 percent, at 8,867.32.

"It was no surprise that MediaTek shares made a strong showing after the IC designer reported impressive first quarter results, defying conventional wisdom that the first quarter is usually a slow period for the semiconductor business," MasterLink Securities analyst Tom Tang yesterday told the Central News Agency (CNA).

“MediaTek's first quarter EPS beat the market estimate of about NT$5 as the IC designer has improved its product portfolio, increasing its production of high-end chips in the mix,” Tang said.

“High-end chips have boosted MediaTek's profit margin and strengthened its bottom line,” Tang said.

According to MediaTek, its first quarter gross margin rose 2.6 percentage points from a quarter earlier to 48.3 percent.

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