Prime View stock spikes on LCD demand

Local flat panel maker Prime View International Co (元太科技) yesterday said earnings spiked last quarter, fueled by vigorous demand for liquid-crystal-display (LCD) screens used in consumer electronics.

Pre-tax profits expanded more than 14-fold to NT$482.59 million (US$14.81 million) in the July to September period, compared with NT$31.99 million a year ago.

"We think the better than expected results are primarily the result of strong demand for small and-medium flat panels this year, which has buoyed prices," chairman Scott Liu (劉思誠) told reporters yesterday.

Gross margin leapt to 17.83 percent last quarter from 5.14 percent a year ago, Prime View said.

The share price of Prime View has jumped more than 50 percent in the third quarter, compared with the benchmark TAIEX index's 6 percent gain.

Looking ahead, Liu said, "the fourth quarter will not be a slack season as it used to be. Demand remains strong based on orders placed by our customers."

Revenues may slide slightly this quarter on a quarterly basis, but the gross margin may sustain the third-quarter level as Prime View would ship more high-margin niche products such as screens for industrial computers as well as flexible displays, Liu said.

"Demand for mobile devices is remarkably strong. We are scouting to source new production in China and Japan to meet customer demand," Prime View spokesman Stephen Chen (陳新宇) said.

Mobile gadget screens and niche products each made up about 30 percent of the company's total revenues of NT$3.23 billion last quarter.

Persistent supply constraint may keep panel prices firm for a period of time, Prime View president Fu Yu-hsuan (傅幼軒) said.

Fu's comments largely matched market researcher DisplaySearch's projection about a persistent uptick for small-and-medium LCD screens.

"Prices for digital camera screens and portable DVDs are rising and we expect the uptrend to extend into the fourth quarter and even the first quarter of 2008," DisplaySearch analyst Kevin Liao (廖顯杰) said by telephone.

Demand for consumer electronics was rising while supply was limited, Liao said.