AU Optronics Corp (友達光電) yesterday said it expects to return to profit this year, as improving oversupply helps boost panel prices.
The nation’s second-largest flat-panel maker is pinning its hopes on easing of oversupply and growing seasonal demand, expecting the combination of factors to lift panel prices in the second half of the year, AU Optronics president Paul Peng (彭雙浪) told reporters after a shareholders’ meeting.
“The industry has become healthier and has turned less volatile,” a public relations officer quoted Peng as saying.
AU Optronics chairman Lee Kun-yao (李焜耀) told reporters that the company’s operations would see quarter-on-quarter improvements this year, adding that its goal was to return to black this year.
Lee said the toughest period for the company was last year, when it posted a record annual loss of NT$61.26 billion (US$2.04 billion), which included NT$6.13 billion reserved for use in anti-trust lawsuits.
Stanley Lin (林其範), an analyst with Oriental Securities Investment Advisory Co Ltd (亞東證券投資顧問), said Auo has a chance of ekeing out profits next quarter at the earliest.
“The recent rise in panel prices will help,” Lin said. “Growing demand because of China’s new stimulus package to subsidize purchases of new home appliances and a new wave of replacement demand for TVs ahead of the Olympic Games [in London] will also give a boost to [the bottom line of] AU Optronics.”
However, the growth momentum would not be sustainable, pushing AU Optronics into another unprofitable quarter in the final quarter of this year, Lin said.
Shareholders yesterday approved the company’s fund-raising plan, which involves selling as many as 800 million new common shares via a private placement in the form of global depositary receipts or through a rights issue.
The company said the proceeds would be used to develop technology to make high-resolution AMOLED panels, improve its financial structure and finance future projects.
AU Optronics said it began shipping small volumes of 4.3-inch AMOLED panels for mobile devices this quarter and it expects the volume to increase significantly by the end of the year.
Asked about the government’s controversial proposal to introduce a capital gains tax on securities transactions, Lee said the levy would discourage investors and adversely impact the domestic stock market, causing turnover to shrink and making it difficult for companies to raise funds on the capital markets.
The government is only focused on tax reform, while overlooking the proposed tax’s severe impact on the future development of the nations’ industries and their competitiveness, Lee said.
Instead of taxing capital gains, Lee suggested the government impose an energy tax to boost the national coffers and to curb fuel consumption as Taiwan’s fuel prices are much lower than those in neighboring countries such as Japan and South Korea.
In related news, AU Optronics and its local rival, Chimei Innolux Corp (奇美電子), are scheduled to sign letters of intent on Tuesday next week to sell flat panels to major Chinese TV brands such as Skyworth (創惟), Hisense Group (海信集團) and TCL Group, the Taiwan External Trade Development Council (TAITRA) said in a statement yesterday.
TAITRA did not disclose detailed figures of the purchases by the Chinese electronics companies.
Earlier this year, a Chinese delegation led by China Video Industry Association deputy director Bai Weimin (白為民) promised to procure US$4 billion in LCD panels from local makers this year, the same amount the delegation purchased last year.