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Auto sector shares up on optimism entering new year

Auto sector shares up on optimism entering new year

Taipei, Dec. 31 (CNA) Shares of domestic auto companies moved higher Tuesday morning after Yulon Group Chairman Kenneth Yen offered an optimistic forecast a day earlier for car sales in Taiwan in 2014, dealers said. As the bellwether electronics sector fell into consolidation mode, investors rushed to park their funds in old economy stocks, such as auto makers, which have sound fundamentals, they said. As of 11:29 a.m., the auto sub-index had risen 1.01 percent, while the electronics sector had added 0.02 percent. The stock exchange's broader weighted index was up 0.38 points at 8,623.05. Shares of Hotai Motor Co., the local sales agent of Japan's Toyota Motor Corp., had gained 2.22 percent to NT$368.00 (US$12.26), and shares of Yulon Motor Co. had risen 1.48 to NT$54.40. Shares of Yulon Nissan Motor Co. were down, falling 0.47 percent to NT$426.00. "Investors are buying on hope that the local auto market will see sales rise in 2014 after Yen's comments," Hua Nan Securities analyst Henry Miao said. "Because the market remains awash in liquidity, such positive leads tend to move share prices." Yen said on the sidelines of the Taipei International Auto Show on Monday that car sales in the local market could reach 400,000 units next year, up from 379,000 units estimated for 2013, on renewed consumer enthusiasm driven by the introduction of new models. Yen is not the only auto industry insider who has offered a rosy forecast for next year. Su Chwen-shing, president of Hotai Motor, also predicted that at least 400,000 cars would be sold in Taiwan in 2014. The Yulon chief said he expected the sales momentum seen at the end of 2013 to carry over into the new year. Between Jan. 1 and Dec. 27, car sales in the local market totaled 372,000 units, topping the 365,000 units sold in all of 2012, when car sales fell 3.3 percent from 2011. With the ongoing Taipei auto show stirring up buying interest, car sales for 2013 could hit 379,000 units, an upward revision from analysts' earlier estimate of 377,000 units. Several auto makers have said that workers on their production lines are being asked to work overtime to meet strong demand. Yulon Nissan said, for example, that the company has benefited from the launch of the new Super Sentra model, and it expected the backlog of orders for the new model to not be cleared until the end of January. Judging from the higher sales in 2013, Miao said Hotai Motor and Yulon Nissan, the market's most expensive auto stocks, could post NT$14.8 and NT$21.6 in earnings per share in 2013, respectively, compared with NT$13.76 and NT$16.43 recorded in 2012. "But auto stocks, in particular heavyweights Hotai Motor and Yulon Nissan, have gained substantially in recent sessions due to optimism toward their bottom lines on strong buying by institutional investors," Miao said. "Hotai shares could top out at around NT$400.00, and Yulon Nissan shares could see strong technical resistance at around NT$440.00," Miao said. (By Tien yu-pin and Frances Huang)


Updated : 2021-06-19 14:18 GMT+08:00