Local flat panel maker TPO Displays Corp (統寶光電), yesterday said it is selling a handset panel production line located in Japan, a move an analyst said may give a boost to the company's long-term turnaround efforts.
TPO, the world's No. 9 maker of small-and-medium sized flat panels, has lost money each year for the past four years.
TPO shares made their debut in 2003 on the nation's Emerging Stock Market.
The company eked out a NT$57 million (US$1.7 million) net profit in 2002.
Shares of TPO jumped 5.1 percent to NT$8.45 and its parent company Compal Electronics Inc (仁寶) climbed by 3.83 percent to NT$31.15 yesterday on the news, outperforming the benchmark TAIEX index's 1.29 percent gain.
"The company is planning to sell production equipment located in Japan," TPO said in a filing to the Taiwan Stock Exchange.
TPO was formerly known as Toppoly Optoelectronics Corp before it was renamed last June.
The company, which is based in Miaoli County, did not disclose details about the value of the transaction or the potential buyer, citing a non-disclosure agreement.
TPO's statement came after the Chinese-language Commercial Times reported yesterday that TPO was in talks with Chinese panel component maker Shenzhen Laibao Hi-Tech Co (
TPO makes handset screens at the Japanese plant, which it obtained through a US$21 million deal with Royal Philips Electronics NV last year.
"The deal will be good for TPO as the fixed expense will be lower," said Roger Yu (
Selling the cost-inefficient factory would also put TPO in a better position to return to the black this year as demand for panels recovers, Yu said.
During the first four months of the year, TPO posted revenues of NT$1 billion, a 20 percent rise over the NT$839 million it reported for the same period last year.
Overall, the revenues of global small-and-medium flat panel makers are
expected to fall 5 percent annually to US$16.6 billion this year from US$17
billion last year as panel prices continue to erode, market researcher
Display Search forecast.
However, tightening supplies of panels will partly offset price declines,