Tue, Jan 18, 2005 - Page 10 News List

Delta shares jump on `Sharp' news

PRODUCTION DEAL The shares closed up by almost 2 percent yesterday after a newspaper reported that it will make rear-projection televisions for Japan's Sharp

By Lisa Wang  /  STAFF REPORTER

Shares of Delta Electronics Inc (台達電) jumped almost 2 percent yesterday on a report that it will soon produce rear-projection televisions for Japanese consumer electronics giant Sharp Corp.

It is seen as a significant progression for Delta, the world's biggest maker of computer power-supply systems, in branching out to flat-screen TVs for faster growth.

"It is a meaningful step for Delta to supply TVs for well-known electronics vendors like Sharp," said Vincent Chen (陳豊丰), an analyst at CLSA Ltd in Taipei.

Prior to this, Delta has only had orders from small-channel vendors in northern America and in China -- ?such as Vivitake Co and Gateway Inc, according to Chen.

Chen made the remarks in reaction to a Chinese-language report that said Delta was set to produce 56-inch rear-projection flat-panel TVs for Sharp. The move is to aid the Japanese vendor to take a bigger share in the US, the biggest rear-projection TV market in the world.

The news gave a boost to Delta's stock price. Delta shares rose 1.96 percent to close at NT$52 on the Taiwan Stock Exchange.

Delta did not deny the report, and tried to play down the news.

"It is inappropriate to comment on our customers," said company spokesman Jess Chou (周志宏) in a phone interview with the Taipei Times.

"We believe rear-projection TV will be an area with great growth potential," Chou said.

Sales growth in the new business this year will almost double that of last year, but the audio-video division may contribute less than one-tenth of Delta's sales this year, up from 4 percent last year, Chen projected.

"The contribution perhaps looks small, but that it is good enough for Delta as it seeks a gradual extension into other growth areas," he said.

Based on Chen's projection, Delta should report sales of NT$67.9 billion for this year, up about 20 percent from an all-time record high of NT$56.4 billion last year, with earnings per share at NT$4.69 this year.

An analyst with KGI Securities also gave a thumbs-up to Delta's progress in securing orders from Sharp.

"It will prove that Delta, a supplier of power supply systems, is capable of making high-quality rear-projection TV sets," said the analyst, who requested anonymity.

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