Chunghwa Telecom's board approved plans for a NT$19.1 billion ($628 million) capital reduction to return cash to investors, a Reuters report said.

Under the plan, the company will distribute around NT$1.6 per share to its shareholders, pending their approval in August, the firm said in a statement.

Chunghwa Telecom is targeting a return on equity of 15% in the medium term and 18% in the long term, a spokeswoman said, but did not give further details, the Reuters report also said.

Earlier in the week, Citigroup upgraded its rating on Chunghwa stock to "buy" from hold" after the news of plans for the capital reduction first emerged.

Citi set a 12-month price target of T$85.00 on Chunghwa's stock, over 13% higher than its Friday closing share price of T$75.00. Its shares slipped 0.13%, outperforming the benchmark TAIEX index's 3.37% drop.

The company said earlier this month it plans to expand investments in southeast Asia as the domestic market becomes saturated, starting from countries like Vietnam, and that it also expects to launch telecom services in Cambodia.

Source:Wireless Asia