WHAT THE BROKER SAID
About a year ago BNP Paribas Peregrine placed an 'outperform' rating on the stock of TPV Technology, one of the world's leading manufacturers of computer monitors and scanners and their spare parts. It set a 12-month share price target of HK$3.27.
The report said TPV was well positioned to benefit from the rapid development of the global market for liquid crystal display (LCD) monitors. With capacity and use expanding at TPV's facilities and a new plant planned for 2004, TPV was expected to begin to see earnings driven by LCD monitors.
BNP expected LCD panel prices to fall, enhancing company margins, and the gross margins on cathode ray tube monitors to gradually expand, thanks to greater economies of scale and an effort by management to trim costs through efficient designs. The 'outperform' rating was because of this and because of an undemanding valuation against its peers.
In November TPV said it would postpone a plan to build a plant in Fujian because of uncertainty over the global economy. The company was posting a 15.1 per cent year-on-year rise in net profit to US$14.15 for the quarter to September.
In April TPV reported a 17.9 per cent gain in net profit to US$51.09 million in 2002. The company attributed the improved result to increased sales of thin-film transistor (TFT) LCD monitors and original design manufacturing contracts. Turnover rose 20.9 per cent to US$1.5 billion. TPV said it expected the contribution from TFT-LCD monitors to increase to more than 50 per cent and overtake cathode ray tube monitors in driving the company's revenue.
In June the company released quarterly results that were stronger than expected, with net profit rising 34 per cent from the same period last year to US$14.40. On Friday the counter closed at HK$3.025.
