Siliconware Precision Industries shares higher on dividend payout ratio


TAIPEI — Shares of Siliconware Precision Industries Co., one of Taiwan’s leading integrated circuit packaging and testing service providers, moved higher Friday morning on a 2012 dividend payout ratio of more than 90 percent, dealers said.

As of 11: 28 a.m., shares of Siliconware had climbed 1.54 percent to NT$33.05 (US$1.11) with 1.90 million shares changing hands. The benchmark weighted index on the Taiwan Stock Exchange was up 0.06 percent at 7,816.48 points.

“Such a high dividend payout ratio was largely the result of the company sitting on large cash funds on hand,” Grand Cathay Securities analyst Mars Hsu said. “The high ratio is expected to raise the return on equity and make investors happy.”

In a statement released Thursday, Siliconware said its board of directors has proposed a cash dividend of NT$1.67 per share for 2012. Based on its earnings per share (EPS) of NT$1.82, the payout ratio is 91.75 percent.

Based on the stock’s closing price of NT$32.55 Thursday, the proposed cash dividend represents a dividend yield of 5.13 percent.

The dividend payout is expected to cost the company NT$5.14 billion in cash, Siliconware said. In addition, the board of directors has proposed paying NT$469 million in cash bonuses to its employees and giving NT$48.13 million in remuneration to its board of directors and supervisors.

As of the end of last year, Siliconware’s cash on hand totaled NT$15.86 billion, down slightly from NT$15.94 billion recorded at the end of 2011. The high liquidity level reflected the company’s ability to generate stable income, Hsu said.

He said 2011 and 2012 were the years for IC packaging and testing service providers to raise capital expenditure for expansion, but the sector could take a breath this year after its expansion.

“Due to lower fund demand this year, Siliconware decided to useits cash on hand by proposing such a dividend in a bid to boost shareholder returns. Otherwise, the company would have had to pay a tax on its retained earnings,” Hsu said.

In 2012, Siliconware posted NT$5.62 billion in net profit, or NT$1.82 in EPS, compared with NT$4.84 billion in net profit or NT$1.55 in EPS the previous year. Its consolidated sales for 2012 totaled NT$64.66 billion, up 5.6 percent from a year earlier.

Hsu said Siliconware may post around NT$2 in EPS for 2013.

“Siliconware will continue to generate stable earnings but the growth will not be significant, as the growth of smartphone sales worldwide is likely to slow down, which could affect the company’s bottom line,” Hsu said.

In the fourth quarter, the communications sector, largely referring to smartphone and tablet computer manufacturing, was the major revenue source for Siliconware, accounting for 53 percent of its total sales.

Hsu said Siliconware shares could face stiff technical resistance as the stock moves closer to NT$35.