HannStar Display Corp (瀚宇彩晶) has become one of investors’ favorites, as the flat-panel maker is expected to emerge from year-long losses later this year amid encouraging business prospects and a major asset gain.
HannStar was the most heavily traded stock in the past two sessions, with 78 million shares changing hands on Saturday and 114 million shares on Friday, Taiwan Stock Exchange data showed.
“A reduction in panel supply in the industry has lent support to the company’s outlook,” HannStar spokesman Justine Chien (簡宏毅) said by telephone on Friday.
“We expect the supply and demand situation to become healthier in the second half of the year,” Chien said.
Handset panel supplies are on the decline and are becoming increasingly tight as South Korean LCD panel suppliers LG Display Co and Samsung Electronics Co are shutting down their less-advanced factories and relocating their capacities to produce higher-resolution organic light-emitting diode (OLED) panels, HannStar said.
The closure of a 4.5-generation plant by local rival Chunghwa Picture Tubes Ltd (CPT, 中華映管) has further cut the global handset panel supply, according to market watchers.
Falling supply supported the prices of 5-inch handset panels by 5 percent last month from July, according to market researcher IHS Technology. LCD module prices would likely increase sharply, especially for 5-inch high-definition products, IHS said.
About 60 percent of HannStar’s total revenue comes from handset panels, Chien said.
The company focuses on more value-added panels used in cars and industrial devices, he said.
Recovering demand reflected on HannStar’s revenue performance, which jumped 24.9 percent to NT$2.27 billion (US$71.94 million) last month from NT$1.82 billion in July, company data showed. Last month’s figure marked a three-year high.
Shipments of small and medium flat panels surged 46.6 percent to 39.9 million units last month from 27.22 million units in the previous month, HannStar data showed.
Chien said that the company would receive an asset gain of 218 million yuan (US$32.63 million) from selling a subsidiary in Nanjing, China.
The income is considered a boon for HannStar’s bottom line, coming at a time when the firm is heading for a turnaround after improving its quarterly loss from NT$921 million in the first quarter to NT$703 million last quarter.
Gross margin, a precursor to turnaround, climbed to 1 percent last quarter, compared with minus-7 percent in the previous quarter, the company’s financial statements showed
HannStar shares plunged 4.73 percent to NT$6.85 on Saturday, ending five sessions of gains. The stock market was open on Saturday to make up for the Mid-Autumn Festival holiday from Thursday to Sunday this week.
HannStar shares have surged 76.09 percent since the beginning of the year, outperforming the TAIEX’s 8.58 percent increase over the same period.
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