Sat, Feb 25, 2012 - Page 11 News List

Flat panel makers rally on AUO chief’s ‘restocking’ remark

Staff Writer, with CNA

AU Optronics Corp (AUO, 友達光電) and Chimei Innolux Corp (奇美電子), two of Taiwan’s leading flat-panel makers, rallied yesterday on the Taiwan Stock Exchange, amid signs of a pick-up in prices of some large panels, dealers said.

Many investors scrambled to pick up the two stocks on expectations the two companies would benefit from the upswing in price and return to the black, they said.

AUO shares closed up 6.71 percent at NT$15.9, while the stock price of Chimei Innolux advanced 3.31 percent to NT$15.6, both out-performing the TAIEX’s 0.28 percent gain.

AUO president Paul Peng (彭雙浪) said on Thursday that capacity utilization at its 7.5 generation plants had become tight as buyers were restocking inventories. As a result, prices of certain flat panels, such as 24-inch screens used for personal computers and 40-inch and 42-inch panels for TV use, are on the rise on strong demand from China and the US, Peng said.

“AUO’s comments on market conditions did trigger buying and in rival Chimei Innolux, particularly after the two companies incurred large losses last year,” Concord Securities (康和證券) analyst Henry Sun (孫豪志) said.

Last year, AUO incurred a net loss of NT$61.45 billion (US$2.08 billion), or a loss per share of NT$6.94, compared with NT$7.41 billion in net profit in 2010, on falling global demand and weak pricing.

Despite the buying spree triggered by AUO’s comments, Sun said he remained cautious.

“The price hikes simply reflected the effects of recent inventory adjustments in a market downcycle,” Sun said.

This story has been viewed 3182 times.
TOP top