Alexa
  • Directory of Taiwan

TPK shares boosted by cash dividend proposal

TPK shares boosted by cash dividend proposal

Taipei, March 4 (CNA) Shares of TPK Holding Co. (??) moved higher Wednesday morning after the touch panel supplier proposed a cash dividend for 2014 that represented a dividend payout ratio of higher than 50 percent, dealers said. The buying also reflected hopes that TPK will secure orders from Apple Inc. to supply touch screens for production of the highly anticipated Apple Watch, which is likely to be unveiled later this month, they said. As of 11:09 a.m., shares of TPK had added 1.15 percent to NT$220.50 (US$7.02), with 1.90 million shares changing hands. The weighted index on the Taiwan Stock Exchange was up 0.27 percent at 9,631.62. "After seeing the losses incurred by TPK shares in recent sessions, investors simply seized on the dividend proposal to go after a bargain, which triggered a technical rebound for the stock," Hua Nan Securities analyst Kevin Su said. At a board meeting Tuesday, TPK proposed issuing a cash dividend of NT$0.5 per share in 2014. Based on its earnings per share of NT$0.84, the proposed cash dividend represented a 59.5 percent payout ratio. Investors seemed impressed by TPK's generous dividend policy even if the touch panel supplier has seen its bottom line suffer amid escalating competition in the global touch panel business, dealers said. The Taiwanese company's market share has been eroded by Chinese rivals' efforts to boost production capacity and moves by several Taiwanese flat screen makers, such as AU Optronics Corp. (??) and Innolux Corp. (??), to get into the touch panel business, they said. In 2014, TPK's EPS fell to the lowest they have been since the company went public in Taiwan in October 2010. The 2014 figure was much lower than NT$21.21 recorded a year earlier. "I prefer to think the current gains in TPK shares were technical in nature as the dividend proposal prompted investors to take advantage of the stock's latest downturn," Su said. "It remains to be seen whether TPK will get orders from Apple, which would allow it to improve its profitability." Rumors have emerged that Apple will place orders with TPK for Apple Watch production, and some market sources believe it could secure orders from the U.S. consumer electronics giant to supply touch panels for the next generation iPhone 6s. "Nobody in the market has been able to verify the information. We have to watch closely whether TPK's sales will accelerate the rest of this year. I think investors should beware of TPK shares despite the current rebound," Su said. Local media have reported that TPK is planning to cut its capital expenditure in 2015 to NT$4.5 billion from NT$13.9 billion last year. "If the report turns out to be true, I'm worried that the cut in capex indicates that TPK has a cautious attitude toward market demand," Su said. (By Frances Huang)


Updated : 2021-09-28 16:30 GMT+08:00