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Profits surge for No. 3 LCD maker

Chunghwa Picture Tubes Ltd (中華映管), the nation's third-largest liquid-crystal-display (LCD) maker, yesterday reported pre-tax income of NT$5.46 billion in the first quarter, a six-fold rise from a year ago and an 80 percent increase from the previous quarter.

Earnings per share (EPS) rose to NT$0.87 in the first quarter, from NT$0.54 in the previous quarter, a company executive told investors yesterday.

"The first quarter's EPS is barely satisfactory," said chairman Frank Lin (林鎮弘), adding that EPS in the second quarter would improve along with higher gross margins.

The company's gross profit may grow to 35 percent in the second quarter, up from 23.4 percent in the first quarter, Lin said. Return on equity (ROE) in the first quarter climbed to 29.03 percent from 18.55 percent the previous quarter, the company said.

Chunghwa Picture may consider revising upward its forecast for this year. The company earlier predicted NT$8.52 billion in pre-tax income this year.

"We will take this into consideration ... a decision will come out soon," Lin said.

However, the plasma display panel (PDP) business continued to bleed red ink, losing NT$400 million in the first quarter. Lin said Chunghwa Picture Tubes was planning to make the unit an independent company.

"We plan to collaborate with other local companies to run this PDP business ... This could be realized by the end of this year," Lin said.

The industrywide shortage of panels would continue in the second quarter, with demand estimated at around 32.2 million panels and supply at 31.4 million units, Chunghwa's sales and marketing vice president Liu Chih-chun (劉治軍) said.

Liu attributed the shortage to tight production of upstream materials such as glass substrates and driving integrated circuits.

He added that the problem at the furnace of the world's second-largest thin-film transistor liquid-crystal display (TFT-LCD) glass-substrate maker, Asahi Glass Co, could further hold up the supply of materials.

The average selling price of 15-inch and 17-inch panels could rise by between US$5 and US$10 a piece in the second quarter, Lin said.

Chunghwa Picture forecast its total panel shipments to hit 12 million panels. The company expects to generate revenue of NT$129 billion this year: 68 percent from TFT panels, 29 percent from cathode ray tubes and the remaining 3 percent from plasma display panels.

Total worldwide production of large-size TFT LCD panels is expected to increase by 56 percent this year from last year, the Market Intelligence Center under the Institute for Information Industry estimated yesterday.

The capacity of Taiwanese suppliers would grow the fastest this year, by 79 percent, compared with 61 percent for South Korean companies and 18 percent for Japanese, the center forecast.

"Taiwan is expected to overtake Korea as the number one player in this realm in the third quarter this year," said Cynthia Chyn (秦素霞), the center's deputy managing director.
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