TPK bullish on growth

By Lisa Wang  /  Staff reporter

Thu, May 23, 2013 - Page 13

TPK Holding Co Ltd (宸鴻), the world’s biggest touch panel maker, expects revenue and net profit to continue growing this year, as demand for touch panels used in mobile devices remains strong, an executive said yesterday.

That could mean another record year this year, after the company — a major supplier of Apple Inc — posted a net profit of NT$13.82 billion (US$461.3 million), or NT$42.24 per share, and NT$173.66 billion in revenue last year.

Based on last year’s strong financial results, TPK’s shareholders yesterday approved a proposal to distribute cash dividends of NT$21 per share. That implies a dividend yield of 3.49 percent, based on the stock’s closing price of NT$601.

“As the [touch panel] industry is still booming this year, our revenue and profit will continue to grow from last year,” TPK chairman Michael Chiang (江朝瑞) told reporters on the sidelines of the annual shareholders’ meeting in Taipei.

Global shipments of touch panel modules are expected to grow 28.7 percent year-on-year to 1.93 billion units this year, while worldwide sales are forecast to surge 33.7 percent to US$21.42 billion from US$16.02 billion, Chiang said, citing statistics from NPD DisplaySearch.

Like its local peer Innolux Corp (群創光電), TPK is also facing supply constraints, with both companies saying they might not be able to meet customers’ demand for panels used in smartphones, tablets and notebooks throughout the year.

To help solve this problem, TPK is expanding its capacity from its current 2 million units a month, Chiang said.

A new production line in Taiwan using one-glass solution technology will start producing touch screens in July, and a new 5.5G plant in China will commence operations in October, he said.

With customer demand rising and capacity expanding, the company’s revenue will rebound in the second half of the year, TPK chief financial executive Freddie Liu (劉詩亮) said, while reiterating the growth forecasts he made last month.

TPK, which mainly produces panels for smartphones and tablets, also aims to generate 10 percent of its revenue from touch panels used in notebooks this year, the company said.

Meanwhile, Wintek Corp (勝華), another touch panel supplier for Apple, has filed suit with China’s intellectual property agency, claiming that certain TPK patents are invalid, in an effort to counter a patent infringement lawsuit filed against the company by TPK.

In related news, Wintek said its shareholders had approved a plan to raise funds by issuing up to 200 million common shares in the form of global depositary receipts.

The company plans to raise up to NT$3 billion and will use the proceeds to buy raw materials overseas.

Wintek posted a loss of NT$841 million in the first quarter, after recording a loss of NT$2.88 billion last year.

The company is optimistic about swinging back into the black in the second half of the year, with Wintek chairman Hyley Huang (黃顯雄) forecasting better growth momentum in the third and fourth quarters.

With an eye on the growing tablet and notebook markets, Wintek has been expanding its slim one-glass-solution touch panel capacity over the past three years and can turn out 6.5 million to 7 million 10-inch touch panels a month, company spokesman Jay Huang (黃忠傑) said by telephone.