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Shares of casing maker sharply higher after Q1 results

2012/04/24 12:13:03

Taipei, April 24 (CNA) Shares of Catcher Technology Co., a Taiwan-based casing supplier, moved sharply higher Tuesday morning after the company reported better-than-expected earnings for the first quarter, dealers said.

The buying also reflected hopes that Catcher's sales will increase quarter by quarter as its customers launch new notebook computer and smartphone models over the rest of the year, they said.

As of 11:23 a.m., Catcher shares had added 2.11 percent to NT$194.00 (US$6.58) with 16.27 million shares changing hands, while the weighted index was down 0.13 percent at 7,471.64.

"The first quarter results appear encouraging, helping Catcher leave behind the impact of a suspension in operations at its plant in Suzhou," Horizon Securities analyst Benson Huang said.

On Monday, Catcher reported net profit for the January-March period of NT$2.79 billion, up 3.4 percent from the fourth quarter and also up 46.1 percent from a year earlier.

Its earnings per share for the first quarter were NT$3.72, up from NT$3.58 in the fourth quarter and NT$2.86 in the same period of last year, the company said.

"The first quarter EPS was even higher than the range of NT$3.3 to NT$3.5 estimated by the market," Huang said. "It is very likely the the market will raise the current forecast for the company's 2012 EPS of NT$17-NT$18 after the first quarter results."

In 2011, the company posted NT$14.93 in EPS, up from NT$6.66 in 2010.

Catcher was forced by the Chinese authorities to shut down its plant in Suzhou, Jiangsu Province in October 2011 for environmental reasons.

"It is possible that the Suzhou production base will resume production later this year, a move expected to bolster its gross margin and benefit the bottom line," Huang said.

According to Catcher, its gross margin for the first quarter fell 5.1 percentage points to 41.2 percent but rose 1.2 percentage points from a year earlier due to falling sales and a rising Taiwan dollar.

"After the slow season effect of the first quarter fades, I expect Catcher will see its sales and earnings improve quarter by quarter," Huang said.

Several foreign brokerages, such as Macquarie Securities and UBS Securities, expect Catcher's sales for the second quarter to rise more than 20 percent from the NT$8.66 billion posted in the first quarter on the back of new model launches by its customers.

Huang said that after recent corrections in its share price, Catcher shares are expected to continue to recover on the upbeat earnings outlook as foreign institutional investors have resumed buying in the stock.

Foreign institutional investors were net buyers of 1.74 million Catcher shares Monday, according to the Taiwan Stock Exchange.

(By Lo Hsiu-wen and Frances Huang)