Taipei, May 3 (CNA) Shares of flat panel maker Chunghwa Picture Tubes Ltd. took a beating Thursday after the stock was downgraded into the "full delivery" category by the Taiwan Stock Exchange (TWSE), dealers said.
The downgrade, which will take effect Friday, reflected the company's weakening financial conditions which dragged down its book value per share below NT$5 in the first quarter, prompting the TWSE's move, they said.
Shares of Chunghwa Picture Tubes closed down 7 percent, the maximum daily decline, at NT$1.58 (US$0.05) with 7.36 million shares changing hands, while the benchmark weighted index ended down 0.22 percent, at 7,659.53 points.
Under the current securities trading regulations, investors are required to make sufficient deposits in their stock trading accounts before placing orders to trade full delivery stocks, like Chunghwa Picture Tubes, that are facing financial difficulties.
In the first quarter of this year, the flat panel maker incurred NT$2.48 billion in net loss or NT$0.38 loss per share, extending from NT$12.02 billion in net loss or NT$1.93 in loss per share recorded for all of 2011.
In the first quarter, the company's book value per share fell to NT$4.65 from NT$5.13 registered in the fourth quarter of last year.
Market analysts said the further losses of Chunghwa Picture Tubes, which has focused its production on small- and medium-sized screens -- in particular cell phone panels, were caused by the slow-season effects in the global mobile phone market during the January-March period.
In the three months, Chunghwa Picture generated NT$8.39 billion in sales from the small- and medium-sized panel production, which accounted for about 74 percent of its total sales.
The company's shipments of small- and medium-sized screens during the same period fell 17.2 percent from a quarter earlier to 111 million units, while shipments of large-sized panels totaled 1.54 million units, down 21.9 percent quarter-on-quarter.
Analysts said although the global cell phone business has left a slow first quarter behind, competition is getting fiercer than ever, especially in the China market, which serves as the major buyer of Chunghwa Picture Tubes' screens.
(By Pan Chi-i and Frances Huang)