08.30.2001
Funds raised for Nan Ya Tech

• Development: As promised, Formosa Group will support Nan Ya Tech’s 500m new share issue. Nan Ya Plastics (1303.TT) purchased 296m shares, with other members of the group participating in the share offering to raise NT$7.5bn for Nan Ya Tech. Now, Formosa Group holds more than 70% of Nan Ya Tech.

• Analysis: Nan Ya Tech held zero cash on hand at end 1H01, resulting in financial risk to the operation. As firm continues to operate at a loss, more fund raising may be required, particularly as outlook for 3Q01 will remain weak.

• Primasia View: We believe burden on Formosa Group is widening as Nan Ya Tech posts negative returns for 2001 and possibly 2002 as well. Avoid in favor of better DRAM plays like ProMos.