Sat, Jun 09, 2018 - Page 12 News List

HannStar says car display push pays off

RELIEF:The company aims to benefit from the US lifting sanctions against ZTE, which means it would no longer have to apply for permission for sales to the Chinese firm

By Lisa Wang  /  Staff reporter

Handset display manufacturer HannStar Display Corp (瀚宇彩晶) yesterday said it expects display shipments for vehicles and industrial devices to contribute between 15 and 20 percent of its total revenue this year following diversification efforts.

To minimize risks associated with volatility in the LCD industry, HannStar said it has been expanding its product lineup and tapping into niche segments in search of a better and secure profit margin.

HannStar, which operates a 5.3-generation plant in Tainan, said the strategy is workable and has helped it turn a profit even during market slumps.

The company last quarter reported an operational profit margin of 31 percent before interest, taxes, depreciation and amortization, beating Innolux Corp’s (群創) 19.5 percent and AU Optronics Corp’s (友達光電) 16 percent.

HannStar, which entered the car display market three years ago by supplying displays to tier-one automotive brands, rather than focusing on aftermarket automotive supply, expects significant growth in the segment over the next three years, including this year, most of which in dashboard and center display sales, Operations Center head Victor Huang (黃凱勝) said on the sidelines of the firm’s annual shareholders’ meeting in Taipei.

Automotive and industrial displays will make up 15 to 20 percent of the company’s total revenue this year, a 5 to 10 percentage point rise, Huang said.

HannStar attributes the shift to lukewarm mobile demand this year, after LCD panels used in smartphones and feature phones were responsible for more than 60 percent of last year’s NT$23.74 billion (US$796.2 million) in revenue.

The company supplies LCD panels for smartphone vendors such as China’s Oppo Mobile Telecommunications Corp (歐珀移動) and Vivo Electronics Corp (維沃移動通信), as well as for feature phones to cope with demand from developing nations.

“The prices for small and medium-sized panels have stabilized,” company spokesman Justin Chien (簡宏毅) said. “We hope that prices will pick up in the second half this year, when demand returns ahead of the peak season.”

Washington lifting some of its sanctions against ZTE Corp (中興通訊) would help boost Hannstar’s sales to the Chinese firm, as it would no longer have to apply for permission to do so, it said.

Shareholders yesterday approved the distribution of a cash dividend of NT$0.5 per common share, making for a payout ratio of 24.88 percent based on earnings per share of NT$2.01 last year.

Shareholders also approved a proposal to issue 500 million common shares to raise funds to replenish operating capital and forge strategic partnerships.

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