Tatung Co’s (大同) financial performance this quarter would be uncertain after the home appliance maker last quarter sold assets to maintain profitability, a local equity analyst said yesterday.
“The asset sale was aimed at making its [Tatung’s] earnings report look good,” the analyst told the Taipei Times by telephone.
The analyst, who requested anonymity, said that Tatung’s core business is profitable and its real-estate assets are still valuable, but a number of loss-making subsidiaries are dragging its earnings growth.
Tatung in 2003 transferred most of the land it owned to its wholly owned subsidiary Shan Chih Asset Development Co (尚志資產開發), the Chinese-language Business Today reported.
Based on the weekly magazine’s investigation in 2016, the plots covered more than 155 hectares and were valued at NT$108.4 billion (US$3.45 billion at the current exchange rate).
The company last quarter sold about 20,000m2 of land in New Taipei City’s Tucheng District (土城) to Maw Der Property Development Co (茂德機構) for NT$7.08 billion, with a disposal gain of NT$5.54 billion.
That helped the company report a net income of NT$3.06 billion, compared with a net loss of NT$744.43 million a year earlier, with earnings per share of NT$1.34, ending six consecutive quarters of losses, Tatung said on Wednesday last week.
Nonetheless, 27 of its 40 subsidiaries reported net losses in the first quarter, with Green Energy Technology Inc (綠能科技) losing NT$2.81 billion and Chunghwa Picture Tubes Ltd (中華映管) losing NT$2.18 billion.
San Chih Semiconductor Inc (尚志半導體) and Chih Sheng Holding Co (志生投資) were also in the red, losing NT$616 million and NT$237 million respectively, company data showed.
Subsidiaries that are still profitable include Shan Chih Asset Development, Tatung System Technologies Inc (大同世界科技), Tatung Fine Chemicals Co (尚志精密化學) and Tatung Thailand (大同泰國).
However, they earned less than NT$10 million combined in the first quarter. As a result, Tatung’s operating losses expanded to NT$2.33 billion, from NT$1.78 billion a year earlier.
The Taiwan Stock Exchange on Thursday last week said that it would delist San Chih Semiconductor on June 26, as its book value dipped into negative territory, making it the third Tatung unit to be delisted, following Chunghwa Picture Tubes and Green Energy Technology.
Tatung shares yesterday rose 4.64 percent to close at NT$23.7. They have declined 8.49 percent this year.
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