Foreign brokerages cut target prices on TPK shares
February 23, 2014, 12:06 am TWN
TAIPEI--Several foreign brokerages have lowered their target prices on shares of TPK Holding Co. after the touch panel maker reported its first quarterly net loss since its listing on the main board in October 2010.
The brokerages have turned bearish about TPK's earnings prospects amid concerns over fiercer-than-ever price competition, which could further squeeze the company's bottom line.
One of the downbeat foreign institutional investors, Bank of America Merrill Lynch, said an escalating price downtrend in the industry is expected to continue to affect TPK's profit margin and the touch panel maker will not see an improvement in operations until the annual peak season in the third quarter.
Merrill Lynch downgraded its target price on TPK shares to NT$150 (US$4.95) from NT$230, but maintained its “underperform” rating on the stock.
The brokerage also cut its forecasts for TPK's earnings per share in 2014 and 2015 by 34 percent to NT$16.77 and NT$20.84, respectively.
On Friday, shares of TPK closed down 1.10 percent at NT$180.00 on the Taiwan Stock Exchange, where the weighted index ended up 0.9 percent at 8,601.86 points. The stock has lost more than 60 percent since the third quarter of 2013 on fears of the company falling into the red.
Last week, TPK reported NT$1.61 billion in net loss for the fourth quarter of last year, or NT$4.88 in loss per share, compared with NT$1.01 billion in net profit, or NT$3.06 in EPS the previous quarter.