Mon, Jul 09, 2007 - Page 12 News List

Prime View looks ready for prime time

INVESTMENT INTEREST The LCD manufacturer's stock more than doubled in price on Friday. The company's new profitability is based on its flexible display products

By Lisa Wang  /  STAFF REPORTER

A lack of profitability in the past kept Prime View International Co (元太科技) from ranking high in investors' portfolios, but with its new and high-margin flexible display business on track, the nation's first flat-panel maker is now on the radar of a growing number of investors this year.

The liquid-crystal-display (LCD) panel maker's stock more than doubled to NT$41.45 on the GRETAI Securities Market on Friday -- compared with a closing price of NT$16.10 on Jan. 2 -- far better than the TAIEX's 16 percent gain.

Overseas investors' increased holding of the small-cap Prime View amounted to 3.17 percent as of last Friday, up 0.79 percent from 2.38 at the beginning of the year, though they have not made a call yet.

Improving profitability was one of major reasons behind the rally. Hsinchu-based Prime View posted profits for the first quarter when most LCD panel makers around the world, including blue-chip AU Optronics Corp (友達光電), suffered losses because of oversupply.

Prime View points to its new flexible displays and its effort to develop niche LCD products -- including those for digital photo frames and touch panels -- for its improved performance.

"The new businesses have helped us obtain better margins than our competitors," chairman Scott Liu (劉思誠) told reporters early last month, while declining to provide specific figures.

Prime View is now the world's sole supplier of flexible displays, having switched its focus from flat screens smaller than 10 inches to DVD players.

Rivals such as Samsung Electronics Co and LG Electronics Inc have only been able to make such products in their laboratories and have not set timetables for mass production.

The company entered the flexible display business after it bought a flexible display unit from Royal Philips Electronics NV in 2005.

Prime View now supplies flexible displays to Sony Corp for its electronic readers, which have a paper-thin, power-saving LCD panel, and allow users to store hundreds of books via a USB drive, or PC.

Such flexible displays are now being used in electronic gadgets such as mobile phones, replacing conventional LCD panels, and may be used in automatic identification tags in the future.

In the short term, Prime View expects revenues and profits in the third quarter to double from the second quarter, riding on the industry's recovery, president Fu Yu-hsuan (傅幼軒) told reporters during a party celebrating the firm's 15 anniversary on Saturday.

The growth would be driven primarily by strong demand for small-and-medium sized LCD panels used in global positioning systems, digital photo frames and Ultra-mobile PCs, Fu said.

Prime View earned NT$85.63 million (US$2.6 million) in net income on NT$1.81 billion in revenues in the first three months of the year.

The company said revenues in the second quarter rose to NT$2.49 billion.

As for flexible displays, Fu said the use of such panels have expanded to more applications, including electronics newspapers, he said.

Prime View supplies flexible displays to 20 customers and it said seven of them planned to launch new products later this year.

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