TAIPEI — Shares of Gold Circuit Electronics Ltd., one of Taiwan’s leading makers of printed circuit boards (PCBs) for notebook computers, took a beating on the Taiwan Stock Exchange yesterday morning after a fire broke out at its plant in Changshu, China on Thursday, dealers said.
Investors rushed to dump their Gold Circuit shares amid fears that the disruption of production at the Changshu plant as result of fire damage will affect the company’s profitability, dealers said.
As of 11: 35 a.m., shares of Gold Circuit had fallen 5.84 percent to NT$6.61 (US$0.22) with 4.39 million shares changing hands. The weighted index was down 0.72 percent at 7,568.04 points.
According to Gold Circuit, production at the plant is likely to be suspended for several months and it is not clear when operations will resume.
The company said its production lines in Taiwan and in Suzhou, China will make up the shortage resulting from the disruption. However, the accident may result in a sales drop of about 15 percent, it added.
“The production suspension has created uncertainty over the company’s operations,” Horizon Securities analyst Benson Huang said. “That’s why the stock encountered sell-off right after the market opened.”
Huang said Gold Circuit’s PCBs for notebook computers have an estimated gross margin of just 5-6 percent amid weakening global demand for notebooks.
“Such a gross margin is not at all impressive,” Huang said. “The production suspension is likely to make the situation even worse.”