Shares of AUO rally on Feb. sales reports


CNA

TAIPEI — Shares of AU Optronics Corp. (AUO), one of Taiwan’s leading flat panel makers, staged a rally yesterday after the company reported an almost 30-percent increase in sales for February, dealers said.

Many investors have high hopes that AUO’s revenue will continue to increase due to a buying spree ahead of China’s Labor Day holiday, which will start from May 1, they said.

AUO closed up 3.56 percent to NT$16 yesterday, with 87.93 million shares changing hands. AUO announced Thursday it posted NT$27.96 billion in consolidated sales for February, up 28.8 percent from a month earlier and also up 3.2 percent from a year earlier.

The company said shipments of large-sized screens used in desktop computers, notebook computers and liquid crystal display (LCD) TVs for February rose 30 percent from January to exceed 9.50 million units. Large-sized panels served as the major revenue source of AUO and Chimei Innolux. According to AUO, TV panels accounted for 42 percent of its total sales in the fourth quarter of last year.

“The increase in sales and shipments showed AUO’s customers were restocking their inventory after recent inventory adjustments,” Horizon Securities analyst Benson Huang said.

“As China’s Labor Day holiday is approaching, demand for TV sets in the China market is expected to pick up and shipments of TV panels will increase accordingly,” Huang said.

“I expect AUO will experience an improvement in its bottom line quarter by quarter this year,” Huang said. “It is likely for the company to cut its net loss by half.”

In 2011, AUO incurred NT$61.45 billion in net loss with a loss per share of NT$6.94, compared with NT$7.41 billion in net profit recorded a year earlier on falling global demand and weakening pricing capability.

However, Huang said as AUO shares have gained a lot in recent sessions amid improving market sentiment, it is possible for the stock to encounter technical resistance at around NT$16.80.