Hermes market cap cut by over NT$20 billion in 2 days amid concern
Market capitalization Hermes Microvision Inc. (
), a semiconductor inspection tool and equipment supplier, was cut by more than NT$20 billion ( US$ 631 million) after its share price was hammered in the past two trading sessions amid lingering concerns over the global integrated circuit industry.
Shares of Hermes fell 10 percent, the daily maximum decline, on the local over- thecounter (OTC) market Tuesday to close at NT$1,280.00, with 1.07 million shares changing hands after a 10 percent plunge seen a session earlier. In the past two sessions, the stock fell NT$295, or about 18.7 percent, to sharply push down its market cap.
The stock remained the second-most expensive one in the local market behind only smartphone camera lens supplier Largan Precision Co. ( ), which closed up 1.54 percent to end at NT$2,970.00 on the local main board.
At the end of Tuesday’s session, Hermes’ market cap stood at NT$90.88 billion, down about NT$20.9 billion from NT$111.83 billion recorded at the end of the July 31 session before the integrated circuit production equipment maker held an investor conference in which it cut its sales forecast for 2015.
Hermes shares faced heavy downward pressure soon after the local OTC market opened
of Tuesday as its lower- thanexpected sales forecast disappointed investors, dealers said. Selling escalated in the midmorning session to push down the stock to down 10 percent, and the weakness continued into the end of the session, they said.
In the July 31 investor conference, Hermes said that since global demand for high- tech gadgets has shown signs of weakening, many IC firms have put their investments in production equipment on hold.
Hermes said that while the company remains confident in the global IC industry in the long term, it fears that its sales growth for 2015 will be compromised by the current demand weakness.
As a result, Hermes said in the investor conference that its 2015 consolidated sales could grow 5 percent-20 percent from a year earlier, a cut from its previous estimate of a 25 percent- 35 percent year- on- year increase.
The dealers said that market sentiment toward Hermes was also hurt by moves by several foreign brokerages to cut their target prices on the stock by taking the Taiwanese firm’s disappointing sales forecast into account.
One European brokerage has lowered its target price on Hermes shares to NT$ 1,300 from NT$2,500, while a U.S.based brokerage has trimmed its target price to NT$ 1,200 from NT$1,318.