Tue, Aug 10, 2010 - Page 11 News List

Chimei Innolux posts better-than-expected profits

By Lisa Wang and Jason Tan  /  STAFF REPORTERS

Chimei Innolux Corp (奇美電子), the nation’s biggest LCD panel maker, yesterday posted better-than-expected net profits, helped by faster integration and recovering demand for TV panels.

Net income nearly tripled to NT$9.54 billion (US$301 million), or NT$1.43 per share, in the second quarter, compared with NT$3.39 billion, or NT$0.87 per share, in the first quarter, according to a company statement.

Gross margin climbed to 12.8 percent last quarter from 10.3 percent in the first quarter.

“The results have greatly exceeded the market’s expectations,” an analyst with Fubon Securities Investment Services Co Ltd (富邦投顧) said. “We are impressed by the company’s integration efficiency, which will help boost profits in the future.”

Most analysts had expected the synergy to happen about a year after the integration of Chi Mei Optoelectronics Corp (奇美電子) and TPO Display Co (統寶光電) on March 18, he said.

“We have completed the first wave of integrating the three companies by re-locating our Chinese factories in Shenzhen, Ningbo and Nanjing and we are planning to do make structural adjustment,” chief executive Tuan Hsing-Chien (段行建) told an teleconference.

Tuan also said the company hoped to grow its monitor and TV assembling businesses, easing investors’ concern that Hon Hai Precision Industry Co (鴻海精密), Chimei’s biggest stakeholder, would take over the businesses, as some media have reported.

“The speculation is not correct,” Tuan said.

Chimei has a shipment target of just under 40 million LCD monitors and about 5 million TVs this year, he said.

Given the outlook for the current quarter, Chimei financial executive Eddie Chen (陳彥松) said shipments of PC and TV panels would be flat or fall slightly, compared with last quarter’s 33.89 million units, of which TV panels accounted for 41 percent.

Panel prices could come down by single digit percent, from US$119 per unit because of excess inventories and an increase in panel supply, the company said. In the second quarter, prices increased 4.4 percent quarter-on-quarter.

Chimei plans to invest between NT$80 billion and NT$100 billion on capacity expansion this year.

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