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Shares of casing supplier Catcher jump after target prices raised

TAIPEI -- Shares of Catcher Technology Co., one of Taiwan's leading metal casing suppliers, surged Friday after several foreign brokerages raised their target prices on the stock amid optimism about the company's earnings outlook, dealers said.

The buying was also sparked after Catcher reported a record high net profit for 2013, largely on the back of solid demand for mobile devices such as smartphones and tablets.

Shares of Catcher rose 5.77 percent to close at NT$220.00 (US$7.26) with 20.65 million shares changing hands, while the weighted index on the Taiwan Stock Exchange ended up 0.91 percent at 8,387.35 points.

The stock opened sharply higher in the wake of its 2013 results, and momentum accelerated as investors were encouraged to pick up Catcher shares after foreign institutional investors raised their recommendations.

In an investor conference held a day earlier, Catcher said it posted NT$13.80 billion in net profit, up 27.6 percent from a year earlier, while its earnings per share (EPS) stood at NT$18.38 compared with NT$14.40 recorded in 2012.

Last year, Catcher's consolidated sales totaled NT$43.25 billion, up 16.80 percent, while its gross margin for 2013 fell 0.9 percentage points to 42.4 percent. The company's EPS and consolidated sales were also the highest levels in its history.

In the fourth quarter alone, Catcher's net profit rose 25.3 percent from the third quarter to NT$3.47 billion, while its ESP for the October-December period rose 25.2 percent from a quarter earlier to NT$4.62.

The fourth quarter's gross margin stood at 41.7 percent, little changed from the third quarter.

Catcher said it has spent almost NT$2.5 billion in capital expenditure so far this year to expand its production capacity, to satisfy growing orders from its clients. The company said its capex for 2014 is likely to surpass NT$9.63 billion recorded in 2013.

Among one of the upbeat foreign brokerages about Catcher's earnings outlook, Citigroup Global Markets said the metal casing supplier has secured orders from new clients, a move that has diversified its client portfolio and reduced its dependence on Apple Inc., which is one the largest buyers of the Taiwanese company's products.

Citigroup has raised its target price on Catcher shares to NT$279 from NT$255, while leaving a “buy” recommendation on the stock unchanged.

HSBC Securities said Catcher has been gearing up to install new computer numerical control (CNC) facilities to meet growing demand from Apple, which is likely to launch new iPhones later this year.

HSBC Securities has raised a target price on Catcher shares to NT$265 from NT$263 and maintained an “overweight” recommendation on the stock.

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