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HannStar Display posts record-high quarterly profit

HannStar Display Corp (瀚宇彩晶), one of the nation's liquid-crystal-display (LCD) panel makers, yesterday posted record high quarterly profit in the third quarter as prices rose on strong demand.

During the third quarter, net income jumped to NT$6.14 billion (US$189 million), or NT$1.22 per share, compared to losses of NT$3.04 billion a year ago and net profits of NT$1.44 billion in the second quarter.

"Supply for all applications has been tight since April. We are unable to meet customers' demand," president Joe Chou (周定輝) told investors via an online conference.

The average selling price rose around 13 percent year-on-year, or almost 19 percent quarter-on-quarter to US$146 per unit in the quarter ended last month, according to HannStar.

Looking forward, Chou said demand may start to weaken in December due to seasonal factors, which may cause a low-single-digit percent drop in panel prices in the final quarter, compared to those in the third quarter.

"As demand may bounce back in February and March, HannStar does not plan to lower production in the first quarter," Chou said in response to an investor's question.

Factory usage is expected to be 100 percent in the fourth and first quarters, he said.

Output is expected to slide by a low-single-digit percentage in the fourth quarter from the third quarter after the sale of a third-generation panel division to Taichung-based handset panel maker Wintek Corp (勝華科技) for NT$9 billion, Chou said.

HannStar will operate one plant, a fifth-generation plant, which makes LCD panels primarily for computer monitors.

"There is no timetable for a next-generation factory yet. At the moment, we will focus on optimizing our plant efficiency and own-brand business," Chou said.

HannStar expected shipment of brand-name monitors to reach 3 million units this year.

HannStar planned to increase capital spending slightly next year to NT$3 billion from NT$2.5 billion this year, mostly for production efficiency and maintenance.

HannStar shares are set to resume trading tomorrow.
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