AU Optronics Corp’s (AUO, 友達光電) shares showed resilience yesterday, as investors shrugged off the flat-panel maker’s decision to price its new American depositary receipts (ADR) next week at a discount, dealers said.
Many investors remained upbeat about AUO’s bottom line after the company’s losses in the first quarter narrowed significantly from the previous quarter in the face of rising demand, they said.
AUO shares rose 0.37 percent to close at NT$13.65, with 211.45 million shares changing hands. They outpaced the TAIEX, which inched up 0.08 percent to close at 8,135.03.
“The market widely expects AUO to turn a profit this year,” Horizon Securities (宏遠證券) analyst Benson Huang (黃重善) said. “Judging from the stock’s performance today, the discount in the ADR pricing has been eclipsed by such optimism.”
In a statement released on Thursday evening, AUO said additional ADRs scheduled to be issued on Tuesday have been priced at US$4.40 per unit, or the equivalent of NT$13.04 per common share.
The pricing represented a 4.1 percent discount to AUO’s closing price in Taipei on Thursday. After the announcement, the company’s ADRs fell 9.2 percent on Wall Street overnight.
AUO said it expects to raise about US$322.2 million from the ADR sale, a figure that could rise as high as US$348.3 million if the issue’s underwriters exercise their over-allotment option in full.
The funds would be used to expand AUO’s production capacity and upgrade its technology, the company said.
“The sell-off of AUO ADRs on Wall Street overnight simply reflected arbitraging by foreign investors, but such a steep decline was not seen on the local bourse today,” Huang said.
AUO incurred a net loss of NT$3.32 billion (US$112 million), or a loss per share of NT$0.36, in the first quarter, compared with a net loss of NT$12.95 billion, or a loss per share of NT$1.39, in the fourth quarter last year.
The first-quarter results were also an improvement over the same period last year, when AUO posted a net loss of NT$13.78 billion, or a loss per share of NT$1.54.
In the January-to-March period, AUO’s display business posted a profit and had an operating margin of 0.2 percent, compared with a minus-3.4 percent margin in the fourth quarter of last year.
“On the back of rising global demand, AUO is likely to break even in the second quarter,” Huang said. “It is possible AUO will post NT$0.3 to NT$0.5 in earnings per share for all of 2013.”
AUO posted a loss per share of NT$6.19 last year, slightly less than the loss per share of NT$6.94 it recorded in 2011.