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Uni-President stock bullish as Lo takes helm
Taiwan News, Staff Writer
2014-03-31 05:09 PM
Uni-President Enterprises Corp. (1216) conducted an enterprise-wide succession in a short two months at the end of last year. Founder Kao Chin-yen completely relinquished the post of chairman to be succeeded by Lo Chih-hsien. In November and December of last year, Lo officially took over as head of Uni-President and set the stage for the era of Lo Chih-hsien. The company stock gained strength, refreshed itself among outsiders, and swept away the past image Uni-President stock as a stable blue chip. Market players generally believe, from the performance of company stock, that it is not difficult to unveil Lo’s ambitions.

Lo assumed the position of Uni-President president in 2007. In five years, he attempted to utilize a large-scale acquisition model to enlarge the company’s territory in the mainland Chinese market. Then Lo refocused on core business and disposed of extracurricular operations to enhance the company’s resource efficiency.

After Kao stepped behind the scenes in recent years, the passing of the torch accelerated last year. During Uni-President’s June shareholder’s meeting Kao’s daughter Kao Shiu-ling and Lo were voted onto the Board of Directors. Kao Shiu-ling also accepted chairperson positions in a number of companies in preparation of a full succession.

In December of last year, Uni-President’s generational shift kicked into high gear. Lo successively assumed the chairmanship of Ton Yi Industrial Corp. (9907), President Chain Store Corporation (2912),and TTET Union Corporation (1232) to officially complete the intergenerational transfer of power.

The dawning of the Lo era also brought about the resignation of Hsu Chung-jen who singlehandedly created the domain of Uni-President convenience stores. Hsu jumped ship to Pxmart causing significant waves in the industry. However, President Chain Store is built on a solid foundation and was not overly affected by the leadership change. President Chain Store’s revenue growth last year was 4.14%. After adopting IFRS accounting practices, consolidated revenue surpassed NT$200 billion for the first time with net income of NT$8.03 billion and an EPS of NT$7.73. This year the company will issue a NT$6 cash dividend. Recently the company’s stock has been moving upwards with a high of NT$220.5 close to its historical high of NT$229. The stock closed at NT$215 on Monday, up NT$4.

Uni-President’s profit overcast for last year also set a new record with an estimated EPS of approximately NT$2.64. Lo also emphasized that there are no downsides in this year’s business outlook. The company’s stock began to rebound in February. Barclays also adjusted Uni-President’s rating upwards to “buy.” The company’s EPS this year is expected to reach NT$2.98 with a target price of NT$62.7. The stock closed at NT$53 on Monday, up NT$1.

TTET Union’s EPS last year was NT$4.42, and it issued a cash dividend of NT$3.8 per share. Recently, the company’s stock has been bullish. Last Friday the stock closed at NT$66.7 and seemed ready to challenge its historical high of NT$69. It closed at NT$67.5 on Monday, up NT$0.8.

In terms of Ton Yi Industrial, institutional investors estimated its EPS last year at NT$0.82 which established a new three year high. Another record was broken in January of this year when the company posted revenues of NT$3.59 billion. The company’s stock has been bullish from last year until now and, currently, it looks like this trend is unstoppable. The stock closed at NT$34.6 on Monday, up NT$0.6. It has the potential to reach new highs in the short term.

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