Tue, Oct 30, 2012 - Page 13 News List

Chimei reports smaller loss in Q3

By Lisa Wang  /  Staff reporter

Chimei Innolux Corp (奇美電子), the nation’s biggest LCD panel maker, saw a significant reduction in its quarterly loss after gross margins returned to positive territory for the first time in seven quarters, bolstered by its development of new and high-margin TV panels.

Net loss narrowed to NT$3.72 billion (US$127 million) in the quarter ending Sept. 30, compared with a loss of NT$9.57 billion in the second quarter. Chimei lost NT$17.26 billion in the third quarter of last year.

The quarterly loss was smaller than a loss of NT$4.7 billion estimated by Fubon Securities (富邦證券) analyst Calvin Shao (邵琮淳), who holds a negative view on Chimei because of growing competition from Chinese panel makers.

Chimei’s gross margin rebounded to 3.3 percent last quarter, from minus 1.7 percent in the second quarter and minus 9.9 percent in the same period last year, the company said, adding that it expected further margin improvement this quarter

“Overall, demand [for TV and PC flat panels] looks healthy in the fourth quarter,” Wang Jyh-chau (王志超), general manager of Chimei’s Tainan operations, told a teleconference.

Wang said LCD TV panel supply would become tight this quarter as Chinese customers continued to place orders to build up inventory even after China’s Golden Week holiday earlier this month, thanks to Beijing’s incentive program launched in June to subsidize energy-efficient TV purchases.

“We do not see signs that demand will weaken any time soon,” Wang said. “We expect demand will be quite good for the whole of next year after supply and demand reach a healthy balance in the third quarter.”

Shipments of PC and TV panels would be flat as its factory utilization had already risen to 95 percent last quarter from about 90 percent a quarter ago.

Last quarter, TV panels revenues accounted for a bigger, or 43 percent, share of Chimei’s total revenue of NT$129.55 billion, from 39 percent in the previous quarter, after shipments grew 15 percent sequentially to 40.7 million units. Shipments of larger, over 40-inch LCD panels rose to 19 percent by revenue, from 16 percent in the same period.

Chimei is the biggest TV panel supplier to China’s major TV brands, including TCL Group.

“We have focused on differentiating our [TV and PC] products,” Wang said.

Chimei saw strong demand for its new TV panels, such as 29-inch models for the emerging markets and 58-inch panels for developed countries, he said.

Shipments of small-and-medium sized flat screens, mostly used in mobile devices such as handsets, is expected to be flat this quarter, from last quarter’s 108 million units.

Demand would exceed the company’s capacity by 20 percent this quarter, Chimei said.

Chimei plans to spend between NT$18 billion and NT$22 billion on new equipment next year, compared with this year’s NT$18 billion, chairman and chief executive officer Tuan Hsing-chien (段行建) said.

Chimei added that it was not in talks with Chinese flat panel maker China Electronics Panda Crystal Technology Corp (中電熊貓) to sell its equity, nor planning to sell a panel module assembly factory in Ningbo to Chinese TV maker Hisense Group (海信集團), denying a report by Chinese-language Economics Daily News earlier yesterday.

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