Breaking News, World News and Taiwan News.

Motech shares extend gains on US anti-dumping cut

TAIPEI -- Shares of Motech Industries Inc. (茂迪), one of Taiwan's leading solar cell suppliers, extended their gains for a second day Wednesday following the reduction of an anti-dumping tariff imposed on the company by the U.S. Commerce Department, dealers said.

Wednesday's upturn was limited, however, after rising by the maximum daily increase of 7 percent on Tuesday as the stock faced stiff technical resistance at around NT$39.40 (US$1.31), the 20-day moving average, they said.

Investors were also reluctant to chase prices because there have been no signs that pricing of solar energy products will stabilize after a recent slump, dealers said.

As of 11:27 a.m., shares of Motech had gained 2.93 percent to NT$38.70, off a high of NT$39.45, with 5.7 million shares changing hands.

The index on the over-the-counter market, where shares of Motech are traded, was down 0.11 percent at 136.13.

“The downward revision of the U.S. anti-dumping tariff simply served as a short-term positive lead for Motech. But the company is still facing a financial penalty, and that could affect its bottom line in the long run,” Ta Ching Securities analyst Andy Hsu said.

In a statement released Tuesday, Motech said that after it filed a petition with the U.S. Commerce Department, the U.S. agency agreed to lower an anti-dumping tariff on the Taiwanese firm to 20.86 percent from the original 44.18 percent.

The revised rate is the lowest faced by any Taiwanese solar company.

In a preliminary ruling in July, the U.S. Commerce Department imposed three different preliminary anti dumping rates on Taiwanese solar product companies — 27.59 percent on Gintech Energy Corp (昱晶), 44.18 percent on Motech, and 35.89 percent on all others.

Erroneous Data

The revision came after Motech argued that the U.S. government used erroneous data to calculate the tariff and asked for a reassessment for the financial penalty.

Gintech Energy has also filed an appeal, seeking a similar revision of its penalty. The U.S. Commerce Department is scheduled to issue a final ruling on the anti-dumping tariffs on Taiwan's solar cell exporters in mid-December.

“Before the final decision is issued in December, the local solar energy sector will remain overshadowed by uncertainty. Its sales are expected to weaken since buyers will continue to shift orders from domestic solar cell vendors to their counterparts in other countries,” Hsu said.

Hsu said the plunge in consolidated sales of the solar energy sector in July generally reflected the adverse impact of the financial penalty imposed by the U.S.

Motech's consolidated sales in July totaled NT$1.20 billion, down 20.47 percent from a month earlier and down 33.75 percent from a year earlier.

Solartech Energy Corp. (昇陽光電) saw its July consolidated sales fall 30.3 percent from a month earlier and 8.5 percent from a year earlier to NT$577 million.

“I remain cautious about the outlook of the global solar energy market as product prices have continued to trend lower recently,” Hsu said, citing a 1.16 percent drop in solar battery prices in the past week.

“Wise investors will not pick up solar energy stocks simply because Motech's anti-dumping tariff was lowered,” Hsu said. “Motech shares could face strong technical resistance at around NT$39.40 in the short term.”

Write a Comment
CAPTCHA Code Image
Type in image code
Change the code
 Receive China Post promos
 Respond to this email
WSJA
Subscribe  |   Advertise  |   RSS Feed  |   About Us  |   Career  |   Contact Us
Sitemap  |   Top Stories  |   Taiwan  |   China  |   Business  |   Asia  |   World  |   Sports  |   Life  |   Arts & Leisure  |   Health  |   Editorial  |   Commentary
Travel  |   Movies  |   TV Listings  |   Classifieds  |   Bookstore  |   Getting Around  |   Weather  |   Guide Post  |   Student Post  |   Terms of Use  |   Sitemap
  chinapost search