Bloomberg News

Samsung Leads Asia Technology Shares Higher on Earnings Outlook

December 13, 2012

Samsung Electronics Co. (005930), whose market value surpassed $200 billion last week, led Asia technology shares higher as it surged to a record on stronger earnings outlook.

The world’s largest maker of smartphones and TVs rallied 2.9 percent to 1,533,000 won in Seoul trading. LIG Investment & Securities Co. and IBK Securities Co. yesterday raised their share-price estimate, citing stronger earnings outlook for 2013.

Expectations for the company’s solid smartphone business contributed to the share-price gain, Korea Exchange Inc. said today. Chimei Innolux Corp. (3481) and AU Optronics Corp., Taiwan’s two largest panel makers, jumped by the 6.9 percent daily limit. The MSCI Emerging Markets Information Technology Index (M1EF0IT) advanced 1.5 percent.

“Foreigners heavily snatched up Samsung shares,” Lee Sun- Tae, an analyst at NH Investment & Securities Co. in Seoul, said by phone today. “The main reason behind this seems to be the company’s brighter fourth-quarter earnings outlook, largely helped by its handset business. Samsung is doing well both in the high-end and lower-end sectors.”

The flat-panel market probably will improve next year because of higher TV demand in China, Jeff Kim, an analyst at Hyundai Securities Co. in Seoul, said in an e-mailed comment today. China will allocate 26.5 billion yuan ($4.2 billion) in subsidies to promote use of energy-saving household appliances and products, according to a statement posted May 16 on the government’s website.

Chimei, AUO

Chimei Innolux, a supplier to Apple Inc. and Sony Corp., jumped 6.9 percent to NT$15.55, the highest since March 9, in Taipei trading after the Economic Daily News said the company plans to boost sales by 10 percent next year. AU Optronics (2409) climbed 6.9 percent to NT$13.95, the highest since May 4.

Chimei Innolux Chairman Tuan Hsing-Chien set the company’s sales target to hit NT$550 billion ($18.9 billion) next year, the Economic Daily reported today, citing people it didn’t name. The company planned to make a profit of between NT$30 billion and NT$50 billion next year, according to the Chinese-language daily newspaper.

Lin Chen-hui, a spokesman for Chimei Innolux, wasn’t immediately available to comment.

“Chimei will probably swing to profit in the fourth quarter, and there may be even a lack of supply next year,” said Peter Liao, an analyst at Nomura Holdings Inc. in Taipei. He has a buy rating for Chimei Innolux and AU Optronics.

“We are very optimistic about the company as it continues to cut costs, as well.”

Chimei Innolux, which also supplies Dell Inc. (DELL:US), said in October that demand for panels used in TVs, tablet computers and mobile phones will increase next year. The company had reported nine consecutive quarters of losses.

To contact the reporter on this story: Weiyi Lim in Singapore at wlim26@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net


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