AU Optronics Corp (AUO, 友達光電), the nation’s No. 2 LCD panel maker, yesterday told shareholders that the LCD industry this year would remain healthy because TV replacement demand for bigger TVs would boost overall panel demand by 10 percent annually this year.
“It is a trend for consumers to opt for new TVs with bigger and higher-definition screens this year. Replacement demand is likely to occur in emerging markets and developed nations as people retire their bulky cathode-ray tube TVs,” AUO chairman and president Paul Peng (彭双浪) told reporters after the company’s annual general meeting.
In March, Peng said the first quarter would be this year’s trough and predicted that sales momentum would pick up gradually for the remainder of the year.
Earnings per share were NT$0.54 in the first quarter, down from NT$0.62 in the previous quarter, but higher than NT$0.03 a year earlier.
Yesterday, AUO shareholders approved a proposal to distribute a cash dividend of NT$0.5 per share based on last year’s net profit of NT$18.06 billion (US$582.54 million), or NT$1.83 per share.
Peng told shareholders that the company has no plan to merge with bigger rival Innolux Corp (群創), denying recent speculation about a merger between the nation’s top two panel makers after former AUO chairman Lee Kun-yao (李焜燿) handed his post to Peng last month.
He also said the company still has some leeway to cope with a trade agreement between China and South Korea, after the two nations formally inked a free-trade agreement on Monday. Based on the Beijing-Seoul agreement, China will not halve tariffs on LCD panels imported from South Korea from 5 percent to 2.5 percent over the next eight years, he added.
However, AUO is to accelerate its pace of improving its product portfolios by boosting shares of high-margin panels, such as those used in cars and in commercial space, as well as touchpanel total solutions, which is to boost its profitability, he said.
Separately, Chunghwa Picture Tubes Ltd (中華映管) yesterday said it would invest 12 billion yuan (US$1.94 billion) on a new sixth-generation plant in China’s Fujian Province after securing support from the Chinese government and strategic partners.
To fund the plant construction, Chunghwa Picture’s board approved a plan to offer new shares to raise 8.4 billion yuan via private placement, according to a statement.
The company also plans to arrange a syndicated loan of 3.6 billion yuan, it said.
The company said the new plant would help it avoid the 5 percent import tariffs leveled by Chinese government on LCD panels.
Chunghgwa Picture last year made a loss of NT$3.98 billion.
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