Tue, Jul 16, 2019 - Page 11 News List

Buyback to reward Innolux’s best

SQUEAKY SHAREHOLDERS:The move is a response to shareholders’ call last month for actions to prop up the firm’s shares, as the stock has been trading below its net value

By Lisa Wang  /  Staff Reporter

LCD panel maker Innolux Corp’s (群創) board of directors approved a share buyback plan yesterday worth up to NT$880 million (US$28.34 million) to reward outperforming employees.

The move is also a positive response to shareholders’ call last month for additional actions by the company to prop up its shares, as the stock has long been trading below its net value of NT$25.46 per share.

Innolux shares yesterday fell 1.24 percent to NT$7.17, their lowest in about a month, underperforming the broader market’s 0.48 percent increase.

The Miaoli-based panel maker said that it plans to buy back about 80 million common shares, which would account for about 0.8 percent of its 9.85 billion capital shares, the company said in a statement submitted to the Taiwan Stock Exchange.

Innolux said the plan would not weaken its financial situation.

As of March 31, Innolux’s cash position stood at NT$44 billion, the company said.

At the annual shareholders’ meeting on June 20, some Innolux shareholders complained that they have been trapped in the stock for 10 years as it has traded at dwindling prices.

The shareholders requested that the company buy back at least 600 million shares — a buyback scheme on a much broader scale than what the company proposed yesterday.

Other shareholders complained that Innolux has in the past few years paid increasingly lower cash dividends than other technology companies.

Innolux this year distributed a cash dividend of NT$0.06 per common share, representing a payout ratio of about 27.27 percent.

Local rival AU Optronics Corp (友達光電) allocated 47 percent of its net profit last year to a cash payout, with the company this year distributing a dividend of NT$0.5 a share.

Innolux chairman Jim Huang (洪進揚) told shareholders that the company would cap its payout ratio at about 30 percent in the future, as it needs to stay financially healthy to cope with the volatile market and necessary heavy investment.

In particular, the LCD industry is experiencing a downturn, which some analysts expect could last up to three years, he added.

Huang, who was tapped last year to be chairman, has laid out a three-year plan that would give the company strong technological capabilities.

The focus of Innolux this year is lowering manufacturing costs as it enhances manufacturing capability, measures meant to help the firm ride out the slump in the LCD industry, Huang added.

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