HannStar Display Corp (
"The growth momentum will continue to drive HannStar's profits this year. Strong demand will leave scant room for a steep drop in panel prices as long as computer users are shifting to slim monitors or notebook computers," HannStar vice president David Chou (
For the first three months of this year, HannStar's earnings reached to NT$1.7 billion, or NT$0.38 a share.
It began a turnaround in the fourth quarter of last year, making NT$1.36 billion in profits.
During the same period, the average price of flat screens increased 5 percent to US$231 per unit from the US$220 recorded in the fourth quarter of last year, according to HannStar.
"As we have already seen some international researchers predict big growth for monitors thanks to computer replacement, I think the supply constraint will last through the whole year and sustain panel prices," he added.
Average annual growth for monitor shipments will be 35 percent for the next few years, with global shipments hitting 138.7 million units in 2007, according to statistics provided by market researcher Display Search.
With growth picking up, Hann-Star forecast its earnings will jump nearly 11-fold to NT$9.2 billion, or NT$1.86 a share, this year, compared with NT$852 million last year. During the same period, revenues are expected almost double to NT$60.25 billion.
Before such rapid growth, HannStar will enjoy a "fair second quarter," HannStar chairman Chiao Yu-chi (
In the three months ending in June, HannStar said it expects unit shipments to increase by a percentage in the mid-teens on a quarterly basis, adding its first fifth-generation (5G) plant has ramped up production.
With increasing shipments of higher-margin 17-inch panels for monitors, the average selling price will rise by single-digit growth in the current quarter, the company said.
Despite the strong financial results, HannStar received lukewarm reaction from industry watchers.
"The results are largely in line with my expectation. But it is still a concern that HannStar has lagged behind local rivals in operating its fifth-generation plant," said Andy Yeh (
HannStar, which has been the slowest in setting up such a fab, said construction is on schedule and that it has started to ship large panels to its Japanese partner Hitachi Ltd in the fourth quarter of last year.
Roger Yu (游智超), an analyst with Polaris Securities Co (寶來證券), said he is not worried about HannStar's late start in vying for a share of the fast-growing flat-screen TV business.
"As only a small number of flat-screen makers are able to produce large panels from their 5G plants, I believe HannStar can still enjoy the boon from the strong flat-screen TV sector," he said.
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