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TPK announces NT$5 dividend payout

TAIPEI, Taiwan -- Touch display panel maker TKP Holding Co. (宸鴻) yesterday held its shareholders' meeting, announcing a dividend payout of NT$5 per share for 2013, a figure deemed paltry for a number of retail investors compared to their previous earnings-per-share performance of NT$21.2.

The company last year garnered consolidated revenues of NT$159 billion, down 9.9 percent year-on-year, and generated an after-tax net income of NT$7.19 billion, yielding earnings of NT$21.21 per share. The company in 2012 paid a cash dividend of NT$20, with the steep fall to the latest announcement of NT$5 per share jarring many members of the investing public.

The company explained its dividend policy by stating that capital must be reserved in anticipation of required investment expenditure, as the touch panel industry is poised to approach a period of consolidation in the next two years.

TPK Chairman Jiang Chao-rui (江朝瑞) stated that despite past breakthroughs in attaining sector leading capabilities such as manufacturing in-cell, one-glass-solution display panels in addition to a collection of competitive products geared toward the lower tiered price ranges, the company had overestimated demand from the emerging market for laptop computers equipped with touch displays and had overcommitted resources. The company also acknowledged that it was a mistake to erect a new production facility in Pingtan County (平潭) across the strait, as the surge in demand for touch-enabled laptop computers following the release of Microsoft's Windows 8 operating system drew less rewards than expected.

Despite the setbacks, Jiang stated that the Pingtan facility will remain online and the company's strategy of timely production capacity expansions remains sound.

Jiang stated that mass production runs at the Pingtan site will proceed as scheduled in the third quarter. The facility may be recalibrated to produce a wide variety of display panels sized 7 to 32 inches, he said, adding that improved diversity in product offerings will help hedge against changing market demand.

Company Expresses Upbeat Outlook

The company outlined that growth prospects will improve in the second half of this year and beyond, propelled by anticipated demand for wearable devices and automotive electronics. Reports indicate that TPK secured an assembly contract for Apple's upcoming iWatch, but the device's panels will be sourced from South Korea's LG Display. Meanwhile, TPK supplies the 17-inch touch display equipped in numerous models of Tesla-made electric cars. TPK stated that demand for automotive electronics display applications is expected to see exponential growth over the next three years. The company noted that manufacturing automotive electronics models differs vastly from consumer electronics. In pursuing the field, the company is facing reduced demand and longer production times as long as two years as well as stringent product requirements such as resilience to environmental factors. In addition to Tesla, the company hinted that it may be supplying more clients next year, listing a Japanese, French and German car maker.

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