Alexa
  • Directory of Taiwan

Hermes Microvision shares jump on Barclays report

Hermes Microvision shares jump on Barclays report

Taipei, Oct. 8 (CNA) Shares of Hermes Microvision Inc., a leading Taiwan-based semiconductor inspection tool and equipment supplier, moved sharply higher morning after Barclays Capital showed optimism over the company's fourth quarter shipments, dealers said. As one of Taiwan's most expensive stocks, Hermes shares also got a boost from the government's move to relax credit restrictions on margin trading and short selling, its latest measure to encourage more trading activity, they said. Shares of Hermes rose 5.02 percent to close at NT$1,360.00 (US$44.73), off an early high of the maximum 7 percent increase with 1.12 million shares changing hands. The index of the over-the-counter (OTC) market, where Hermes shares are traded, ended down 1.39 percent at 138.52. "To my knowledge, several major clients of Hermes held up on placing orders in the third quarter, but will start to place orders in the fourth quarter. I agree with Barclays that Hermes will benefit from the trend," Taishin Securities Investment Advisory analyst Tony Huang said. "As a leader in the semiconductor inspection equipment supplier in the global market, Hermes is expected to continue to capitalize on its lead over its peers to secure more orders," Huang said. In a research note, Barclays said Hermes' sales will double from the third to the fourth quarter, in part because Taiwan Semiconductor Manufacturing Co. (TSMC), one of Hermes's biggest customers, will place orders to support advanced 16 nanometer chip production. In addition to TSMC, Samsung Electronics Co. and SK Hynix Inc. of South Korea are expected to buy inspection equipment from Hermes for their new chip plants expected to begin operations in 2015, Barclays said. Inotera Memories Inc. of Taiwan and U.S.-based Micron Technology Inc.,two dynamic random access memory chip suppliers, will also need inspection equipment from Hermes as part of technology upgrades that kicked off in the second half of this year, Barclays said. Because of this strong anticipated demand, the brokerage said it was maintaining its "overweight" recommendation and keeping its target price of NT$2,000 for the stock. "The fourth quarter could be a peak for Hermes to strengthen its bottom line for 2014," said Huang, who was even more upbeat than Barclays.
He forecast that Hermes' earnings per share for the year could reach NT$48, compared with the foreign brokerage's estimate of NT$44.87. In 2013, Hermes posted EPS of NT$35.09. Huang said the buying also reflected the government's latest measures to boost daily turnover. The Financial Supervisory Commission, the top financial regulator in Taiwan, announced measures on Tuesday designed to boost margin trading volume. The cap on borrowing for margin trading or short selling of a single stock on the Taiwan stock exchange will be raised to NT$30 million from the current NT$15 million and NT$10 million, respectively. For a single stock on the OTC market, the loan ceiling on margin trading and short selling will be raised to NT$20 million from NT$10 million and NT$7.5 million, respectively. The FSC also raised the ceiling for credit balances for margin trading and short selling accounts to NT$80 million and NT$60 million, respectively, from the current NT$60 million and NT$40 million. These new measures are scheduled to take effect on Nov. 10. The FSC said that the measures are expected to boost daily turnover by at least 3-5 percent. "The hikes on credit trading caps are expected to prompt investors to buy into expensive stocks, like Hermes," Huang said. "It was no surprise that investors were more willing to raise their holdings after the government came up with more positive leads to restore market confidence," he said. (By Wu Ching-chun and Frances Huang)


Updated : 2021-04-21 07:21 GMT+08:00