Chi Mei Optoelectronics Corp (
The Tainan-based liquid-crystal display (LCD) panel maker projected that profits will skyrocket to NT$30.15 billion (US$910.5 million), up from NT$7.15 billion last year. Earnings per share will also rise to NT$7.88 from NT$2.73 year-on-year.
"A mild drop in panel prices, a far cry from drastic ups and downs in the past, gives us confidence of hitting that target" Chi Mei president Ho Jau-yang (
Consolidated revenues will double to NT$125.6 billion with a third of that amount coming from high-margin TV screen panels, the company said.
Last year, Chi Mei posted NT$62 billion in revenues.
The company, which supplies Japan's consumer electronics giants Sony Corp and Sanyo Electric Co with panels, aims to boost revenues to NT$150 billion this year, Ho said.
"That projected growth will be primarily driven by rising demand in flat-panel TVs ahead of the Olympic Games and European Football Championships," he said.
Shares of Chi Mei rose 2.3 percent to close at NT$65.50 on the TAIEX, before Ho made his statement to investors.
Sales generated from TV panels will rise to make up 30 percent of the total revenues this year from 3 percent in the second quarter of last year -- when the company started to ship the large-sized panels used in TVs.
To spur demand, Chi Mei expected TV panel prices to fall at a 5-percent pace quarter on quarter in the rest of the year.
But that annual growth rate, however, is viewed by industry watchers as too conservative, now that the average selling price of flat panels has rebounded to US$290 a unit in the first quarter, which is about a 45-percent rise from US$201 a year ago.
"The projection looks conservative to me, but it is understandable that most flat-panel players have been cautious in light of the volatility of panel prices," said Sean Wu (
"My forecast is about 20 percent higher than that," he said.
Another analyst said Chi Mei has a good chance to earn more.
"Chi Mei is expected to make NT$34 billion in profits in 2004," said Tim Chen (
Global revenue from TV flat panels is projected by researcher DisplaySearch to more than triple by 2007, as consumers switch from bulkier tube sets. Against this backdrop, bigger rival AU Optronics Corp (友達光電) said last week that it hopes to earn NT$41.66 billion this year.
But for Chi Mei, supply constraints in key components, LCD glass in particularly, may overshadow such an upbeat outlook, Ho said. The glass supply shortfall could be up to 20 percent, he added.
"We could be seriously affected if the capacity expansion by Japanese Asahi Glass Co does not go smoothly," he said.
Chi Mei relies on Asahi Glass and Corning Inc for its LCD glass.
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