Shares of flat-panel maker Chung
hwa Picture Tubes Ltd (中華映管) took a beating yesterday after the stock was downgraded to the “full delivery” category by the Taiwan Stock Exchange (TWSE), dealers said.
The downgrade, which will take effect today, reflected the company’s weakening financial conditions, which dragged down book value to below NT$5 per share in the first quarter, prompting the TWSE’s move, they said.
Shares of Chunghwa Picture Tubes closed down 7 percent, the maximum daily decline, at NT$1.58 with 7.36 million shares changing hands, while the TAIEX ended down 0.23 percent, at 7,659.53 points.
Under the securities trading regulations, investors are required to make sufficient deposits in their stock trading accounts before placing orders to trade full-delivery stocks, like Chung
hwa Picture Tubes, that are facing financial difficulties.
In the first quarter of this year, the flat-panel maker incurred NT$2.48 billion (US$84.9 million) in net losses or NT$0.38 loss per share, extending from NT$12.02 billion in net losses or NT$1.93 in loss per share recorded for last year.
In the first quarter, the company’s book value per share fell to NT$4.65 from NT$5.13 registered in the fourth quarter of last year.
Market analysts said the further losses of Chunghwa Picture Tubes, which has focused its production on small and medium-sized screens — in particular cellphone panels, were caused by the slow-season effect in the global mobile phone market during the January-March period.
In the three months, Chunghwa Picture Tubes generated NT$8.39 billion in sales from the small and medium-sized panel production, which accounted for about 74 percent of its total sales.
The company’s shipments of small and medium-sized screens during the same period fell 17.2 percent from a quarter earlier to 111 million units, while shipments of large-sized panels totaled 1.54 million units, down 21.9 percent quarter-on-quarter.
Analysts said although the global cellphone business has left a slow first quarter behind, competition is getting fiercer than ever, especially in the China market, which serves as the major buyer of Chunghwa Picture Tubes’ screens.
In addition, the gradual retreat of Chunghwa Picture Tubes and Hannstar Display Corp (瀚宇彩晶) from the large-sized panel market will cause Taiwan’s shipments of large-sized panels in the second quarter to fall 4.8 percent to 67.35 million units from a year earlier, Digitimes Research said on Friday last week.