Chimei Innolux Corp (奇美電子), the world’s No. 3 LCD panel maker, yesterday said that solid demand, primarily from China’s TV market, had helped lift its utilization rate to nearly 100 percent, raising the odds that it would return to profit after one-and-a-half years of losses.
The comments came after recent speculation that an improvement in its bottom line boosted its stock price, which rose near a two-month high at NT$11.45 yesterday.
“Except for some pilot product lines, our [production lines] are fully [utilized],” Chimei chairman and chief executive officer Tuan Hsing-chien (段行建) told reporters on the sidelines of a press conference to introduce the panel maker’s carbon emissions reduction program.
“China’s Oct. 1 [holiday shopping season] is one of the factors driving up utilization,” Tuan said.
Company spokesman Lin Chen-hui (林振輝) told reporters that based on talks with customers in China when company officials visited them, demand is showing signs of exceeding supply.
“Business sentiment looks quite good. Order visibility is clear. We think this positive situation will last through November,” Lin said.
The demand for large-sized panels for televisions and smaller ones for handset devices looks resilient, he added.
The company hopes it could swing into its first month of profit this quarter, he said.
Lock Chang (張小彪), an analyst with Taipei-based research team WitsView, agreed.
“Chimei has a good chance to return to profitability this month as prices for most TV panels and monitor panels have rebounded to levels above their costs,” Chang said.
Prices for 42-inch and 46-inch TV panels were unchanged this month at US$218 and US$280 from a month ago, while prices for 32-inch TV panels rose 0.8 percent to US$127, according to WitsView’s survey.
Chimei said it planned to ramp up production of 65-inch TV panels at its sixth-generation fab after its efforts to develop new niche models, such as 39-inch and 50-inch TV panels, paid off.
Plans to raise NT$5.4 billion (US$183 million) by selling 600 million shares to existing shareholders will proceed as planned.
“Our major shareholders have agreed to subscribe to most of the shares,” Lin said.
The company also expects to raise NT$16.25 billion by offering shares in the form of global depositary receipts next quarter, Lin said.
The fund-raising programs should help Chimei meet creditor banks’ requests to inject about NT$20 billion new funds into the company.
Commenting on the New Taiwan dollar’s recent rally against the US dollar, Lin said each NT$1 rise in the local currency’s exchange rate would erode its revenue by 3.3 percent.
However, the NT dollar’s recent rise would not affect its bottom line this quarter, Lin said, as the local currency started its rally against the greenback after the US Federal Reserve announced a new round of quantitative easing measures last Friday.
It would only impact the company’s profits next quarter if the local currency stays strong, the spokesman said.