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Shares of Hannstar Display higher on credit trading

Shares of Hannstar Display higher on credit trading

Taipei, May 23 (CNA) Shares of Taiwan-based flat panel supplier Hannstar Display Corp. moved higher Thursday morning after investors were allowed to engage in credit trading such as margin trade and short sale for the stock starting from that day, due to its higher book value, dealers said. However, some profit-taking emerged to cap the gains to some extent as the stock has made a strong showing in recent sessions on the back of massive foreign institutional buying after the flat screen maker reported an improved bottom line for the first quarter, the dealers said. As of 11:30 a.m., shares of Hannstar Display had added 6.06 percent to NT$14.00 (US$0.47), off an early high of NT$14.10, with 215.88 million shares changing hands. The weighted index on the Taiwan Stock Exchange was down 1.44 percent at 8,277.58 points. "Look at the expanded trading volume. The lifting of the ban on credit trading today prompted a great number of investors to trade the stock" Ta Ching Securities analyst Andy Hsu said. Last week Hannstar Display reported a net profit of NT$0.45 per share for the first quarter of this year, up from NT$0.06 in earnings per share (EPS) recorded in the fourth quarter of last year. Due to the better bottom line, Hannstar Display's book value per share at the end of the first quarter rose to NT$10.13 from NT$9.43 registered in the previous quarter, breaching the threshold of NT$10 imposed by securities authorities for credit trading. "Hannstar Display is one of the local stocks that has hit a turning point and has witnessed its profitability improving," Hsu said. "In addition to the first quarter results, the company posted NT$0.32 in EPS for April. I think it will have an even better second quarter." According to Hannstar Display, its gross margin for the first quarter stood at 27 percent, up from 21 percent recorded in the fourth quarter of last year, while its operating margin rose to 17 percent from 12 percent. "The better profit margins showed its efforts in adjusting the product portfolio have paid off," Hsu said. "The company has focused on small and medium-sized screen production so that it has benefited from the rising popularity of smartphones in the world market." Hsu said the stock has gained significantly in recent sessions as foreign institutional investors kept buying into the stock amid optimism toward its earnings outlook. Between May 13 and May 22, the stock had gained more than 60 percent after foreign institutional investors served as net buyers of more than 80 million Hannstar shares. "It was no surprise that the stock encountered some profit-taking pressure to limit its uptrend today," Hsu said. Hsu said his brokerage expects Hannstar Display to post NT$0.8-1.0 in EPS for the second quarter as global smartphone shipments remain on the rise. "But, there are concerns that competition in the field will get fiercer in the third quarter as Chinese flat panel suppliers will join the race. Price competition could be seen then," Hsu said. (By Frances Huang)


Updated : 2021-07-24 04:15 GMT+08:00