Wed, Feb 11, 2004 - Page 10 News List

Shares in projector maker surge after upbeat forecasts

BRIGHTER FUTURE Coretronics said falling prices now made its projectors competitive with flat TVs and that shipments will surge


Share prices of Coretronic Corp (中強光電), the nation's No.1 projector maker, surged by the intraday-limit of 7 percent yesterday after the Hsinchu-based company offered an upbeat outlook on rear-projection projectors for this year.

The company expects rear-projection, or digital light processing (DLP), projector shipments to rise to around 400,000 units this year from 170,000 units last year, spokesperson Cindy Wen (溫慧萍) said yesterday.

At an investor conference held on Monday in Taipei, chairman Wade Chang (張威儀) said the company would sell all it could produce and expected sales to rise to about NT$10 billion a year within five years.

"We're optimistic that we can hit that target," Wen said.

The top projector maker reported after-tax income for last year of NT$770 million, or NT$2.01 a share, on revenues of NT$23.9 billion, up 40 percent from the previous year.

Investors welcomed the company's forecast, sending shares of Coretronic up 7 percent to close at NT$42 on the TAIEX.

"It is highly possible that Coretronic could earn more this year due to growing demand for home-theater projectors because of falling retail prices," said Helen Chen (陳佩君), an analyst at Polaris Securities Group (寶來證券).

Chen forecast that Coretron-ic's earnings will double to NT$3.95 a share, in line with shipment growth this year.

Despite the downward pressure on projector prices, Coretronic will be able to sustain its gross margin at around 10.26 percent, the analyst said.

But the uncertain supply of key components such as bulbs could hurt the company's ability to reach the target, she warned.

A recent report released by market researcher Market Intelligence Center (MIC, 市場情報中心) showed that Taiwan's digital projector shipments for this year will rise to around 751,000 units, from 394,000 units last year.

"Digital projectors, which used to be a corporate-oriented product, are now making it onto the shopping list of general consumers," said MIC analyst Annabelle Hsu (徐美雯).

A sharp price decline during the second half of last year has spurred demand for home projectors, she added.

As projector prices fell to US$1,000 each, consumers have been more willing to choose digital projectors, rather than pricey flat-screen televisions, as a major part of their home entertainment systems, Hsu said.

"That will be a boon for digital projector manufacturers," Hsu said.

In addition to digital projectors, Coretronic also diversified into flat-screen televisions last year by producing plasma display panels (PDP) and rear-projection TVs mostly on a contract basis.

But the shipment volume remained small, with Coretronic producing just 1,000 PDP TVs and 5,400 rear-projection TVs during the last quarter, Wen said.

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