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November losses plunge financially troubled flat panel maker shares

2018/12/24 14:44

Taipei, Dec. 24 (CNA) Shares of financially troubled flat panel maker Chunghwa Picture Tubes Ltd. came under heavy downward pressure Monday after it reported a loss for November over the weekend.

Shares of Chunghwa Picture Tubes fell 10 percent, the maximum daily decline, to close at NT$0.64 (US$0.02) on the Taiwan Stock Exchange (TWSE), where the weighted index ended down 0.07 percent at 9,639.70 points.

The stock faced strong selling soon after the local equity market opened as investors took cues from losses in November, and the weakness continued into the end of the session.

Dealers said the November losses raised concerns over the flat panel maker's financial condition at a time when it is planning to seek bankruptcy protection in the wake of disappointing global flat screen market conditions and its piling debt.

In a statement released Saturday, Chunghwa Picture Tubes said it incurred NT$1.28 billion in net losses, or NT$0.15 in loss per share in November after it posted NT$1.356 billion in consolidated sales in the month, down 55 percent from a year earlier.

The Dec. 13 decision to seek bankruptcy protection came after the debt-ridden company saw product prices fall because of a global flat panel supply glut and the ongoing trade dispute between the United States and China.

These unfavorable factors, Chunghwa Picture Tubes said, have made it unlikely that the company and its fully owned subsidiary, Chunghwa Picture Tubes (Bermuda) Ltd., will be able to repay their debts.

According to Chunghwa Picture Tubes, it has NT$34.8 billion in total debt.

In the first nine months of the year, Chunghwa Picture Tubes reported NT$0.93 in loss per share (LPS), compared with NT$0.47 in earnings per share over the same period of last year.

The flat panel supplier suddenly suspended production in two plants in Longtan and Yangmei districts in Taoyuan Dec. 16 on a lack of supply of raw material.

But it announced Dec. 20 that it had reached an agreement with suppliers to restore supply, which paved the way for production resumption.

Dealers said that despite the agreement with its suppliers for production resumption, market confidence in Chunghwa Picture Tubes remained weak and November's losses made investors even more nervous.

Since the announcement to seek bankruptcy protection, shares of Chunghwa Picture Tubes have dived more than 50 percent on the main board.

(By Pan Chih-yi and Frances Huang)Enditem/J