Chunghwa Picture Tubes to build plant in Fujian

Taipei, June 3 (CNA) Chunghwa Picture Tubes Ltd. (??), one of Taiwan's leading flat panel suppliers, has decided to build a 6th-generation plant in Fujian at a cost of 12 billion Chinese yuan (US1.94 billion). In a statement released Tuesday, Chunghwa Picture Tubes said construction of the new Fujian plant is expected to start in September and commercial production is scheduled to kick off in the second half of 2017 with a monthly production capacity of 30,000 flat panel sheets measuring 1.85 meters long and 1.5 meters wide. Analysts said the 6th generation plant will concentrate on small and medium-sized displays for smartphones and tablet computer use, but they raised concerns about the investment's timelines because mobile device growth has moderated. The project will be financed through subsidiary CPT Technology (Group) Co., which is listed on the Shenzhen stock exchange. It plans to issue new shares through a private placement to raise 8.4 billion yuan and secure an additional 3.6 billion yuan in bank loans. Chunghwa Picture Tubes said CPT Technology will bring in strategic investors through the new sale deal and sell them about 5 billion yuan in new CPT shares. CPT Technology specializes in the design, manufacturing, and marketing of flat panels, modules, touch devices and other monitor components in China. After raising the necessary funds for the new plant, CPT will set up a wholly-owned subsidiary in Fujian to run the production complex, Chunghwa Picture Tubes said. Based on the fundraising plans, the parent company will not put up any of its own money in the project. Shares of Chunghwa Picture Tubes soared Wednesday on news of the new investment plan, adding 10 percent, the maximum daily increase on Taiwan's stock exchange, to close at NT$1.33 (US$0.04). Analysts said the strong buying in Chunghwa Picture shares showed that investors were impressed by the way Chunghwa Picture Tubes plans to gain access to funding in China. The company said the Fujian investment is aimed at helping cut operating costs through lower delivery expenses and less delivery time to its customers in China. In addition, the plant will save Chunghwa Picture Tubes' Chinese customers import duties as China imposes a 5 percent tariff on flat panel imports from Taiwan. The new investment plan still requires regulatory approval in Taiwan. Chunghwa Picture Tubes said authorities in China have expressed support for the project. (By Pan Chi-I and Frances Huang)