Shares of Wintek Corp. jump on 60% sales growth in July
August 4, 2012, 12:11 am TWN
TAIPEI -- Shares of Taiwan-based touch panel maker Wintek Corp. bucked the downtrend of the broader market Friday, closing sharply higher after the company reported a more than 60-percent increase in sales for July, dealers said.
The July sales prompted many bargain hunters to take advantage of the stock's relatively low valuation after recent consolidation, but investors have been advised to keep a close eye on price competition in the global touch panel industry, dealers said.
Shares of Wintek rose 7 percent, the maximum daily increase, to close at NT$14.30 (US$0.48), with 68.37 million shares changing hands. The benchmark weighted index ended down 0.69 percent at 7,217.51 points.
Soon after the local bourse opened, the stock began outperforming the broader market, which was hit by disappointment that no action was taken by the European Central Bank overnight to stem the debt problems in the eurozone, dealers said.
The buying mounted, pushing Wintek's share price higher to the daily limit as investors hailed the company's strong sales data for July, dealers said.
Last month, Wintek posted NT$8.39 billion in consolidated sales, up 60.72 percent from June but down 1.51 percent from a year earlier.
In the first seven months of this year, Wintek's consolidated sales totaled NT$59.55 billion, up 16.72 percent from a year ago.
Market analysts said the significant increase in sales for July reflected the rising popularity of Apple's latest tablet computer -- the new iPad -- especially since the gadget hit store shelves in China last month.
In addition, sales of Apple's iPhone 4S have recovered, boosting demand for touch panels, after the U.S. consumer electronics giant postponed the launch of its iPhone 5, the analysts said.
In addition, Wintek is gearing up to enter the one glass solution (OGS) panel production, analysts said, noting that sales of its OGS panels for July rose 15-20 percent from a month earlier.
However, it remains to be seen whether the sales growth will be translated into handsome profits as the global touch panel market is still battling escalating price competition, analysts said.
In 2011, Wintek incurred NT$1.16 in loss per share as price competition eroded its bottom line. In the first quarter of this year, the company posted a meager NT$0.09 in earnings per share.
Analysts said investors had better stay alert when buying into Wintek as the stock could encounter profit taking after its recent significant gains.