01.31.2001
TFT-LCD sector faces difficulties raising capital in stock market

• Acer Display Tech (2409 'Da Ji') will raise capital through a new share issue in Feb.. This move follows two previous reductions in the prospective issue price, as well as previous delays in the issuing plan. The finalized issue price has been drastically reduced to NT$22 from NT$60, while total capital that will be raised has declined to NT$3.3b from the original NT$9b.

• Unipac (5441 'Lian You') also announced a reduction in its new issue price from NT$30 to NT$20, and aims to complete the new issue during 1H01. As a result, the level of funds that can be raised will shrink to NT$4.6b from NT$6.9b.

• With the present TFT-LCD production over-capacity, any decline in TFT-LCD pricing will erode profitability and continue the poor stock price performances across the sector. TFT-LCD makers must increase bank loans to meet large amount capex this year with new production lines on the way. We expect the resulting interest expense to further reduce profitability.

MarthaChen@Primasia.com +886-[0]2-2547-8878