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Chunghwa Picture wildly upbeat

Chunghwa Picture Tubes Ltd (中華映管), the nation's No. 3 liquid-crystal-display (LCD) maker, said yesterday its pretax NT$8.7 billion earnings target for this year was realistic given a sharp rise in shipments and stable panel prices.

The earnings target, if realized, would be an eight-fold increase from the NT$978 million it earned last year.

Chunghwa Picture said its January sales dropped slightly to NT$9.6 billion from NT$10.2 billion in December because the Lunar New Year holidays reduced the number of working days.

The company predicts first-quarter earnings of NT$2.7 billion.

"We expect that growth momentum will continue this year," Frank Lin (林鎮弘), Chunghwa Picture chairman and CEO, told investors during a quarterly meeting yesterday.

Consolidated revenues are expected to grow by 39 percent to NT$120 billion this year from NT$89 billion last year, the company said.

Chunghwa Picture's revenues primarily come from three major areas: thin-film-transistor LCD panels, cathode-ray tubes for televisions and plasma display panels.

"Chunghwa Picture's January earnings beat our expectations," said Eric Twu (涂紀華), a flat-panel analyst at SinoPac Securities Corp (建華證券).

But earnings per share could grow at a slower pace as the company's share capital will expand sharply in the wake of several fund-raisings scheduled for later this year, Twu said.

Chunghwa Picture plans to issue US$250 million (NT$8.5 billion) worth of overseas bonds and raise NT$30 billion in a syndicated loan to finance the construction of a new 4.5-generation product line and a sixth-generation plant in Longtan, Taoyuan County.

James Wu (巫俊毅), a vice president of Chunghwa Picture's financial division, said that unit shipments were expected to grow by nearly 64 percent to around 12 million units this year from 7.32 million units last year.

In addition, stable panel prices are also a key factor for the company to hit the earnings target, said Chunghwa Picture vice president Liu Chih-chun (劉治軍).

Liu predicted panel prices to stabilize this year as the global supply of LCD panels will largely match demand.

Flat-panel shipment growth is expected to be capped by an ongoing shortage of key components such as glass and color filters, Liu said.

But the prices of large-sized panels used in LCD televisions are expected to slide this year as demand weakens, Liu said.

Chunghwa Picture yesterday said it expected to raise about 3.6 billion yuan by offering CPTF Optronics Co (華映福州光電) shares on the Shanghai Stock Exchange in the third quarter this year.

Chunghwa Picture shares declined by 1.29 percent to close at NT$15.3 on the TAIEX yesterday.
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