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Shares of LED chip-maker gain on buyback program

Shares of LED chip-maker gain on buyback program

Taipei, Dec. 29 (CNA) Shares of Epistar Corp., a Taiwan-based light-emitting diode (LED) wafer and chip manufacturer, posted gains Thursday after the company announced a share buyback plan in a bid to support its share price, dealers said.
Led by Epistar, other LED firms also steamed ahead amid improved sentiment toward their earnings outlook after the company received rush orders and hoped its bottom line would be boosted accordingly for the fourth quarter of this year, they said. Epistar rose 0.62 percent to close at NT$64.70 with 8.43 million shares changing hands, while Formosa Epitaxy Inc. rose 0.81 percent to end at NT$18.75 and Edison Opto Corp. added 0.85 percent to close at NT$59.00. The benchmark weighted index finished up 0.25 percent at 7,074.82 points on turnover of NT$52.11 billion, which was the lowest level so far this year. Epistar announced Wednesday it would buy back 10 million shares from the open market at a range of NT$51 to NT$76 between Dec. 29 and Feb. 28, 2012. The company said the repurchased shares will be transferred to its employees as an incentive to encourage them to work harder. Dealers said the LED sector appeared active in recent sessions due to bargain hunting, while the broader market was moving in a narrow range with foreign institutional investors away from the trading floor due to the upcoming New Year holiday. "The share buyback plan did boost interest in Epistar shares today," Grand Cathay Securities analyst Mars Hsu said. "However, I prefer to focus on the industry's fundamentals which remain slow." Hsu said although Epistar has received rush orders recently, the demand could be temporary as product prices were still on the decline. "With pricing remaining weak, I do not think the rush orders would serve as a major boost to the company's profitability," Hsu said. "After the enthusiasm toward the share buyback plan fades, it remains to be seen whether the stock will continue its upswing trend." Concord Securities analyst Kerry Huang said as the production costs of the LED sector remain high, without an explosion in demand, its bottom line will be squeezed. "It will take time for the LED industry to make a long leap," Huang said.
(By Han Ting-ting and Frances Huang)


Updated : 2021-04-13 22:44 GMT+08:00