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September 24, 2017

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ChipMOS jumps nearly 50 percent on Taiwan Stock Exchange debut

TAIPEI -- Shares of ChipMOS Technologies Inc. (南茂), a Taiwan-based integrated circuit packaging and testing services provider, moved sharply higher Friday soon after its debut on the Taiwan Stock Exchange (TWSE).

Dealers said the strong showing reflected an upbeat outlook on earnings in the global semiconductor business on expectations that the industry will rebound strongly in the second quarter after inventory adjustments in the previous two quarters.

With the broader market spooked by a drop on Wall Street overnight, investors rushed to seek new targets, such as the newly listed ChipMOS, to park their funds, dealers said.

Shares of ChipMOS rose 48.11 percent from an issue price of NT$26.50 (US$0.88) and closed at NT$39.25, with 16.44 million shares changing hands on the main board. The weighted index on the TWSE ended down 0.44 percent at 8,908.05 points.

Before the TWSE listing, ChipMOS shares had been traded on the emerging market since April 19, 2013. Under the local securities listing rules, a company has to be listed on the emerging market for at least six months before it can launch a listing on the main board or on the over-the-counter market.

The ChipMOS stock made a strong showing soon after the local market opened, as investors took cues from solid demand for the company's shares during the share sale ahead of the listing, and the momentum continued until the end of the session, dealers said.

During the March 31-April 2 underwriting process, new ChipMOS shares were about 116 times oversubscribed. For the main board listing, the IC packaging and testing service provider sold 21.76 million new shares, raising more than NT$576 million.

According to a prospectus filed with the TWSE, ChipMOS will use the funds as working capital for future expansion and to strengthen its financial structure.

Analysts said ChipMOS' gross margin for the first quarter could rise to about 20 percent, compared with 17.52 percent in 2013, on growing demand for chips for mobile devices. Riding the wave of a rebound in the global semiconductor business, ChipMOS could post an 8-10 percent sequential increase in sales in the second quarter, they said.

ChipMOS is likely to post about NT$3 in earnings per share for 2014, compared with NT$2.76 in 2013, analysts said.

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