Friday, June 24, 2011

Asian LCD Makers Mostly Down on EU Fine

By Aries Poon

The four Taiwanese makers of liquid-crystal display panels fined by the European Commission for operating a price-fixing cartel said Thursday the fines won’t have a significant impact on their operations.

Despite their optimism, many of those affected by the decision saw shares lower Thursday.

Chimei Innolux, which faces the heaviest fine at €300 million, is down 3% at 39.25 New Taiwan dollars (US$1.30), and AU Optronics, which faces a €117 million fine, is down 1.1% at NT$30.45. South Korea’s LG Display is up 0.5% at 40,450 won (US$35.39) despite its €215 million fine.

Morgan Stanley analyst Frank Wang said the charges are substantial, particularly to Taiwan firms.

“It’s a negative surprise that Chimei is fined more than LG…Chi Mei will need to take an earnings bath in” the fourth quarter this year, Mr. Wang said.

He added that AUO’s settlement should be viewed as a positive for finally being resolved, as the company had already booked the fines as expenses in its 2009 account.

Chunghwa Picture Tubes, which faces a much smaller €9 million penalty, is up 0.2% at NT$4.27. It said in a statement that it had set aside funds for the fines as expenses last year, and that the company hasn’t decided whether it will appeal the ruling.

HannStar Display is down 0.5% at NT$5.61 on its €8 million penalty.

The EU commission fined several LCD panel makers, saying they met monthly in Taiwanese hotels to agree on prices and share other commercially sensitive information.

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