Money-losing LCD panel maker Chunghwa Picture Tubes Ltd (CPT, 中華映管) said it plans to sell Chinese assets to boost its book value in an effort to avert the imminent risk of being forced to delist its shares from the local stock market.
The announcement boosted CPT’s share price, which yesterday soared 2.22 percent to NT$0.46, outperforming the TAIEX, which rose about 1 percent.
After eight consecutive years of losses, CPT’s book value has fallen to NT$0.12 per share as of March 31, on the brink of falling into negative territory, according to the company’s financial report submitted to the Taiwan Stock Exchange.
Taoyuan-based CPT would be requested to delist its shares as soon as this quarter if its book value continues to deteriorate and turns negative amid continued losses.
“CPT has no plan to delist its shares,” the company said in a statement filed with the Taiwan Stock Exchange on Monday. “The company will continue to improve its operations and financial structure to boost book value.”
The company said it expects to raise 10 billion yuan (US$1.5 billion) by selling shares of a non-public Chinese subsidiary at an unspecific premium, which is to help lift CPT’s book value.
The proposal was approved by China’s stock market regulator last month, CPT said.
CPT last month sold its shares in two Chinese flat-panel manufacturing subsidiaries to Chinese firms for 1.16 billion yuan.
The company expects to book an asset gain of 270 million yuan this quarter, which is to significantly enhance CPT’s book value, it said.
The company has improved its earnings before interest, tax, depreciation and amortization margin to positive last quarter, the statement said.
LCD panel makers are expected to remain in the red this year, as oversupply has driven panel prices to below cost levels, market researcher IHS Technology said.
The panel maker has accumulated NT$59.34 billion (US$1.83 billion) of losses as of the end of last year, according to the company’s annual report. In the first quarter of this year, CPT lost NT$2.85 billion.
In the company’s annual financial report released last month, CPT said it aims to ship 273 million units of small and medium flat panels for mobile phones, tablets and car displays this year, down by about 30 percent from last year’s 397 million units.
In a separate statement issued on Monday, CPT said revenues increased 2.4 percent to NT$3.72 billion last month from April’s NT$3.21 billion, after shipments of large-size panels surged 73 percent sequentially.
In the first five months of this year, revenues plunged about 24 percent from a year ago to NT$15.95 billion, the company said.
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