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AUO shares soar on upbeat outlook

AUO shares soar on upbeat outlook

Taipei, March 12 (CNA) Shares of AU Optronics Corp. (AUO, ??) moved sharply higher Thursday morning after the Taiwan-based flat panel maker gave an upbeat assessment on demand for this year after the industry shakes off the first-quarter slow season, dealers said. Such optimism also spread to other flat screen suppliers, in particular Innolux Corp. (??), serving as a driver to push up the broader market as investors ignored a lackluster performance on Wall Street overnight, the dealers said. As of 11:02 a.m., shares of AUO had added 6.27 percent to NT$16.10 (US$0.51), with 141.23 million shares changing hands, while shares of Innolux had risen 4.59 percent to NT$15.95 on trading volume of 112.80 million shares. The weighted index on the Taiwan Stock Exchange was up 0.73 percent at 9,592.48 points. "The upbeat forecast about the market outlook did spark buying in the local flat panel sector. In particular, AUO shares followed the strong gains posted by its American depositary receipts (ADRs) on the U.S. market overnight," equity market investment advisory firm CMoney analyst Chen Wei-tai said. AUO's ADRs closed up 2.36 percent on Wall Street Wednesday, when the tech-heavy NASDAQ index ended down 0.20 percent. Talking to the press that day, AUO President Paul Peng (???) said that the first quarter will be the lowest point for this year, so that after the slow-season effects fade, demand for flat screens is expected to increase from the second quarter. In February, AUO posted NT$27.21 billion in consolidated sales, down 24.5 percent from a month earlier, in reflection of the reduced number of working days due to the Lunar New Year holiday. However, the February figure was 9.4 percent higher than a year earlier. Peng said that its major large-sized screen customers are gearing up to place orders with AUO in hope of higher demand for the rest of this year, adding that the upcoming Labor Day holiday in China is expected to create a buying spree among consumers. The AUO executive said that Chinese home appliance vendors are expected to launch massive promotional campaigns after the Labor Day holiday, a move that will further boost flat panel shipments. "AUO could remain profitable this year. But there are fears that the global flat panel industry will continue to face risks in pricing, as large-sized screen suppliers in China will keep expanding their capacity, which will bring down prices," Chen said. "I prefer to hold a cautious attitude for the moment and keep alert over market supply for the rest of this year," Chen said. In 2014, AUO registered NT$18.07 billion in net profit, a new high of six years, up 324.7 percent from a year earlier. Its earnings per share (EPS) stood at NT$1.83 in 2014, compared with NT$0.45 recorded a year ago. Market analysts have anticipated that AUO's EPS will range between NT$1.87 and NT$2.34 for 2015. "The wide EPS forecast range shows that the market remains divided over AUO's bottom line," Chen said. "So the current gains posted for AUO shares are technical in nature after the stock suffered sell-offs in recent sessions," he added. (By Pan Chi-i and Frances Huang)


Updated : 2021-09-25 18:30 GMT+08:00