Chinese Display Maker BOE Has Five-Fold Gain in Third-Quarter Profit as Earnings Slow From First Half(Yicai Global) Oct. 29 -- Profit at BOE Technology Group, a leading Chinese producer of display panels, climbed more than five times in the third quarter from a year earlier, but the pace of earnings growth slowed compared with the first six months of the year.
Net profit was CNY7.3 billion (USD1.1 billion) in the three months ended Sept. 30, up 441 percent from the same period last year, according to the Beijing-based firm’s earnings report released late yesterday. First-half profit had surged 11 times to CNY12.8 billion.
Revenue gained 47 percent to CNY56 billion (USD8.8 billion) in the three months, BOE said, compared with a 89 percent clip in the first half. BOE attributed the third-quarter gain to the industry’s recovery, higher key product prices, and new production capacity.
China’s display panel market has quickly picked up since the start of this year. But prices have dropped from a peak, weighing on BOE’s third-quarter earnings. Still, the performance was in line with the firm’s Oct. 7 forecast for profit to rise between 430 percent and 445 percent. Its share price jumped more than 5 percent that day.
BOE’s shares [SHE:000725] ended today 0.8 percent higher at CNY4.91 (77 US cents). The broader Shenzhen market gained 1.5 percent.
In the first nine months, BOE’s profit soared eight-fold to CNY20 billion on a 72 percent jump in revenue to CNY163.3 billion.
BOE also announced yesterday that it plans to invest CNY2.5 billion to build a vehicle-mounted display panel production base in Chengdu in China’s southwestern Sichuan province. Covering an area of 150,000 square meters, it is expected to begin production by the end of next year.
The new plant will make 14.4 million thin-film-transistor liquid-crystal display panels a year for on-board displays sized between 5 inches and 35 inches, effectively meeting demand, BOE said.
As vehicles become smarter, demand for on-board displays for in-car entertainment, navigation, and safety systems is surging, keeping overall market growth relatively high.
Editors: Dou Shicong, Futura Costaglione
