Innolux Corp (群創), the world’s third-largest LCD panel maker, expects net profit to surpass last year’s NT$21.6 billion (US$690.6 million), backed by robust demand for its TV panels — including its new curved TV screens.
Innolux attributed strong demand for its TV panels to the company’s diversifying product strategy. The Miaoli-based company focuses on making high-margin products such as ultra-high-definition 4K TV panels, and skips producing standard models, such as 32-inch TVs.
“We still cannot fully satisfy customer demand for TV panels, although there is an oversupply in the market overall,” Innolux president Wang Jyh-chau (王志超) told a news conference after the company’s annual shareholders’ meeting.
Innolux said it has shipped 200,000 75-inch TV panels per month this year, outranking rival AU Optronics Corp (友達光電) and becoming the world’s top supplier of 75-inch TV screens.
To duplicate its success in launching better-margin 4K TV panels this year, Innolux plans to produce more wide-color gamut, or hue saturation, TV panels. The company aims to make wide-color gamut panels a standard specification for 50-inch TVs, as it did for 4k TVs two years ago.
Innolux plans to roll out new wide color gamut curve TV panels including 65-inch and 75-inch sizes next quarter.
To support strong demand for its TV panels, Innolux is building a new 8.6-generation production line in Kaohsiung along with a sixth-generation production line to make TV and smartphone panels.
Innolux chairman Tuan Hsing-chien (段行建) said “the [panel] industry is very dynamic and unpredictable. However, our goal is to make higher profits every year.”
“Last year, we made NT$21.6 billion in net profit. This year’s figure will exceed that,” Tuan said.
The company is pinning its hopes on the launch of Microsoft Corp’s new Windows 10 operating system to bring back demand for notebook panels.
Commenting on media speculation about a merger with AU Optronics Corp, Tuan said “the likelihood is very slim.”
“We are too similar [to create synergy],” Tuan said.
The companies operate similar plants, develop similar technologies and even invest in similar LCD component manufacturers, he said.
Besides, the merger would create a company with global market share of more than 30 percent, Tuan said, meaning the new company would face opposition from antitrust watchdogs, he said.
Responding to questions about possible investment in India, Tuan said the company was studying feasibility and it was at a very early stage. The company would invest in India along with Hon Hai Precision Industry Co (鴻海精密), if it decided to do so, he said.
India has huge TV and phone markets, but the country’s lack of sound infrastructure and inability to guarantee the supply of electricity and water is a concern, Innoux said.
Innolux yesterday posted NT$31.2 billion in revenue for last month, representing a 3.7 percent decline from April’s NT$32.4 billion, and a year-on-year fall of 14 percent.
Shareholders yesterday approved the distribution of a NT$0.7 dividend per share based on last year’s net profit of NT$2.31 per share. That represents a dividend yield rate of 4.03 percent, based on the stock’s closing price of NT$17.35 in Taipei trading.
Shareholders also approved the issue of up to 950 million new common shares to fund operations and repay debts.
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