Chimei Innolux Corp (奇美電子), the nation’s top LCD panel maker, is likely to swing into profit in the fourth quarter because of a pricing recovery, continued cost reductions and seasonal demand, Credit Suisse said.
Chimei, the world’s third-largest LCD panel maker after Samsung Electronics Co and LG Display Co, posted a net loss of NT$64.76 billion (US$2.2 billion) for the whole of last year, according to its full-year financial results released on Friday last week.
Chimei reported a net loss of NT$14.84 billion in 2010. Revenue rose 3.4 percent to NT$510.08 billion last year from NT$493.08 billion, the company said.
The company, a subsidiary of Hon Hai Precision Industry Co (鴻海精密), the world’s largest maker of electronics parts, did not provide a complete breakdown of its quarterly results for last year.
As the company earlier reported net losses of NT$44.45 billion as of Sept. 30 last year, the net loss was NT$20.31 billion for the final quarter of last year, based on the company’s full-year results.
Credit Suisse said in the report issued on Monday that Chimei would see quarterly losses continue to narrow this year — with NT$11.88 billion last quarter, NT$6.61 billion this quarter and NT$2.99 billion next quarter — before seeing a net profit of NT$811 million in the fourth quarter.
Credit Suisse analyst Jerry Su (蘇厚合) said Chimei’s first-quarter revenue would fall by 16 percent quarter-on-quarter to NT$109 billion, because of fewer shipments during the slow season. However, revenue is expected to rebound by double digits this quarter from the first quarter on rising demand and recovering prices, he added.
Last week, Hon Hai’s board approved a proposal to increase its stake in Chimei over the next three years, as the subsidiary plans to raise a total of NT$1.94 billion through the issue of new shares to improve its balance sheet and for its creditor banks to agree on a rollover of NT$200 billion in syndicated loans.
Su said Chinese TV makers such as Hisense Electric Co (海信) and Hong Kong-listed TPV Technology Ltd (冠捷) would be potential candidates to subscribe to Chimei’s new shares as Taiwan had recently announced that it would raise Taiwanese panel maker ownership restrictions for Chinese companies from 10 percent to about 50 percent.