Catcher shares down despite over 80% rise in Q3 net profit

Catcher Technology chairman Hung Shui-shu, right, reacts during a press conference on Nov. 7, 2017. Shares of the metal casing maker moved lower Tuesday morning, despite a more than 80 percent quarter-on-quarter rise in third quarter net profit reported by the company a day earlier. (CNA)

TAIPEI (CNA) – Shares of metal casing maker Catcher Technology Co. (可成) moved lower Tuesday morning, despite a more than 80 percent quarter-on-quarter rise in third quarter net profit reported by the company a day earlier.

The selling came as investors pocketed gains built up by the stock a day earlier on expectations that Catcher would report strong net profits after the market closed on Monday, dealers said.

As of 11:01 a.m., shares of Catcher had fallen 2.53 percent to NT$327.50 with 8.45 million shares changing hands on the Taiwan Stock Exchange, where the weighted index was up 0.27 percent at 10,815.53.

On Monday, Catcher outperformed the broader market, ending up 2.28 percent, while the weighted index closed down 0.13 percent.

“Catcher shares are falling for now as investors reacted to the good news by locking in any gains built on good earnings expectations,” KGI Securities analyst Phil Chu said. “But the metal casing supplier’s fundamentals are fine.” In a statement released on Monday, Catcher reported a net profit of NT$7.39 billion for the July-September period, up 80.5 percent from the second quarter and also up 65.2 percent from a year earlier.

It had third quarter earnings per share of NT$9.59, beating NT$5.31 in EPS in the second quarter and NT$5.8 in EPS during the same period last year, while its consolidated sales for the July-September period hit a record high of NT$27.42 billion.

In the first nine months of the year, Catcher’s net profit was up 8.6 percent from a year earlier to NT$13.57 billion, with EPS at NT$17.62, compared with NT$16.21 in EPS in the same period last year.

“To my knowledge, Catcher, which has been dubbed one of the important ‘Apple concept stocks,’ failed to receive any orders from Apple Inc. for production of the premium iPhone X. But the company is still supplying casings for other Apple products such as the MacBook and items from the Android camp.

“So, with a broad customer base, it is riding the waves of peak season effects. I expect the company will see its bottom line improve in the current quarter,” Chu said, referring to Catcher’s October sales.

On Monday, Catcher also reported record high consolidated revenue of NT$12.39 billion for October, up 8.3 percent from a month earlier and up 51.5 percent from a year earlier. It was the third consecutive month in which the company posted record high sales.

Market analysts said Catcher is expected to generate NT$37 billion to NT$38 billion in sales for the fourth quarter. The company is expected to give sales guidance for the fourth quarter at an investor conference on Tuesday afternoon.

“The current selling in Catcher shares is technical in nature as the stock faces stiff technical resistance ahead of the 60-day moving average of around NT$334. But strong technical support exists between NT$317 and NT$320,” Chu said. 

By Jeffrey Wu and Frances Huang