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Shares of Wintek higher on orders for Google tablet production

Shares of Wintek higher on orders for Google tablet production

Taipei, June 29 (CNA) Shares of touch panel maker Wintek Corp. moved higher in heavy trade Friday morning after the company announced it has won orders to provide screens for Google's Nexus 7 tablet computer production, dealers said. However, investors have been advised to trade the stock with caution as it remained to be seen whether the orders will be translated into significant profits and boost the Taiwanese firm's bottom line, they said. As of 11:37 a.m., shares of Wintek had added 2.21 percent to NT$16.20 (US$0.54) with 37.36 million shares changing hands, while the weighted index was up 1.32 percent at 7,264.12 points. "The positive leads related to panel orders for the new Google tablet computers attracted large buying this morning," Mirae Asset Management analyst Arch Shih said, referring to the heavy trading volume. In an annual general meeting held Thursday, Wintek told reporters that its one glass solution (OGS) panels have won orders for the newly unveiled Google's 7-inch tablet computer products, and the shipments of its panels for the new devices in July are expected to reach about 500,000 units. Wintek said it has faith that the OGS panels will become the mainstream flat screen products in 2013. "The orders are likely to lift Wintek's revenue, but I doubt the increase in revenue will be translated into significant profits as the new Google mobile device aims to win a market share through its low-pricing strategy," Shih said. Working with Taiwan's personal computer vendor AsusTek Computer Inc., Google launched the new tablet computer model Thursday, pricing the new device as low as US$199 (NT$5,962) to grasp a market share. "Based on the pricing of the Google Nexus 7 series, I suspect Wintek has felt the pinch of a slash in component prices," Shih said. "It is likely that Wintek's bottom line is coming under pressure, so I remain cautious about the company's earnings outlook," Shih said. Amid fiercer-than-ever price competition, Wintek incurred a loss per share of NT$1.16 for 2011, compared with NT$1.51 in earnings per share recorded a year earlier. In the first quarter of this year, Wintek posted NT$0.09 in EPS. "Compared with rival profitable TPK Holding, which commands more advanced technology, Wintek shares are not the top choice for institutional investors," Shih said. TPK posted NT$48.22 in EPS for 2011, up from NT$22.69 recorded in 2010. In the first quarter, the company registered NT$11.15 in EPS. "The current buying in Wintek shares appears speculative, so investors should keep alert while trading the stock," he said. (By Frances Huang)