Resignation Takes Effect, Heavy Selling Pushes Shares Down 30%
Fubon Securities announced on October 28 that it had applied to resign as a recommending securities firm for Shan Ta Shi's emerging-market shares, effective October 30. The news triggered heavy selling pressure, weighing on Shan Ta Shi's emerging-market share price on October 29. It fell intraday to 395.5, down 428.71, a drop of as much as 52%, before narrowing the loss to close at 575, down 249.21, or 30.24%.
Chairman: Handled in Accordance With Rules, 6 Recommending Brokers Remain
Chairman Wu Xue-zong said emerging-market trading is mainly matched through securities firms, and recommending securities firms are required to maintain a certain inventory of shares. If holdings fall below the required threshold and are not replenished within the deadline, the firm must act in accordance with regulations. Fubon Securities' resignation was handled in compliance with the rules. He said brokerages are welcome to serve as recommending securities firms to boost trading activity, adding that Shan Ta Shi still has 6 recommending securities firms after the resignation.
OTC Listing Schedule Unaffected, Listing Expected in January Next Year
Wu Xue-zong stressed that Shan Ta Shi's OTC listing case has passed review by the OTC Listing Review Committee and was approved by the board of the Taipei Exchange, which agreed to the listing contract on August 26. SinoPac Securities currently serves as the lead underwriter, while the three advisory brokers — China Trust Securities, Capital Securities and Taishin Securities — remain unchanged. The OTC listing case will not be affected at all, with the listing expected in January next year.
First-Three-Quarter Revenue Up 68.4% Year-on-Year, Aiming for Continued Growth in Q4
On operations, Wu Xue-zong said operations remain normal, with business trending upward through the first three quarters of this year. Cumulative revenue for the first three quarters reached NT$590 million, up 68.4% year-on-year. Orders from semiconductor-fab customers reflect long-term demand, and he hopes fourth-quarter results can extend the upward trend. In addition, Shan Ta Shi will continue to pursue new customers and new orders to drive operating growth next year.
Fubon Securities: Did Not Participate in Underwriting, Resigned to Avoid Volatility Impact on Profit and Loss
Fubon Securities said the main reason for applying to resign is that Fubon is neither the lead nor a co-lead securities firm and did not participate in its OTC listing underwriting operations, serving only as one of the recommending securities firms, with 7 recommending securities firms including the lead and co-lead brokers. Considering that Shan Ta Shi has entered the OTC listing underwriting stage and that emerging-market share prices have been volatile recently, increasing market-making difficulty for recommending securities firms, it resigned after a comprehensive assessment to avoid larger impacts of price volatility on profit and loss. During its tenure, its emerging-market shareholdings and quotation adjustments were handled in accordance with Taipei Exchange rules and internal guidelines.