07.16.2001
Chiao Tung to issue UMC ADR in 4Q

• Development: Holdings of UMC (2303 ‘Lian Dian’) by Chiao Tung Bank increased to 385m shares after the semiconductor manufacturer went ex-dividend. Chiao Tung has decided to issue a UMC ADR in 4Q01 after consulting with UMC.

• Analysis: Carrying cost of UMC may be realized at NT$2.80 per share, with issue of 30m shares expected to produce NT$1.5bn in profits.

• Primasia View: The issue of a UMC ADR will provide Chiao Tung with the necessary funds to make provisions and fulfill its earnings forecast. We maintain our opinion that shares are attractive on the basis of adjusted P/B ratio of 0.7x.

WilliamFong@Primasia.com +886-[0]2-2547-8864