TPV plans bigger LCD business on mainland demand

PUBLISHED : Friday, 25 March, 2011, 12:00am
UPDATED : Friday, 25 March, 2011, 12:00am

TPV Technology, the world's biggest contract manufacturer of computer monitors, is gearing up to expand its television business this year as the mainland becomes the industry's largest market for liquid-crystal display (LCD) televisions.

Chairman and chief executive Jason Hsuan said yesterday that he expected minimal impact, 'at least for the first half of the year', on the company's production from the component supply-chain disruption caused by Japan's earthquake.

Kowloon-based TPV typically has as much as three months' worth of components inventory. Still, it hopes that the operations of its Japanese suppliers will gradually return to normal after their power supply and transport issues are resolved.

'Since Japan is the leading source of LCD components and raw materials, manufacturers in Taiwan, Korea and China have expressed concerns about the supply chain for the next few months,' David Hsieh, the vice-president for Greater China at market research firm DisplaySearch, said.

TPV posted a 19.9 per cent rise in net profit last year to US$169.3 million from US$141.2 million in 2009, on the back of large unit shipments of LCD televisions and computer monitors worldwide. The company's LCD television shipments grew 55.6 per cent to 14.8 million units, compared with 9.5 million units the previous year. Computer monitor shipments increased 22.3 per cent to 56.5 million units from 46.2 million units.

Total revenue rose 44.8 per cent to US$11.6 billion from US$8 billion in 2009. Basic earnings per share reached 7.37 US cents, compared with 6.69 US cents the previous year.

TPV's share price was down 2.43 per cent to close at HK$4.41 yesterday.

Hsuan said an important development for TPV last year was forging a five-year, exclusive licensing deal with Royal Philips Electronics in September to manufacture and distribute Philips-brand LCD televisions on the mainland. Production under this deal began in January.

'The established sales channels and premium-brand image of Philips products in China's first- and second-tier cities will complement our brand's strong presence in the third- and fourth-tier cities, and rural areas,' he said.

The company, which had more than 37,000 staff worldwide as of December, also invested US$213.4 million in various capital projects last year, including automating various manufacturing facilities, increasing the capacity of LCD television production at its factory in Xiamen to five million units a year and constructing a new plant in Beijing.

The infrastructure expansion is expected to help the company meet rising demand for LCD televisions worldwide. 'Demand in developing regions will surpass that in developed markets this year, and China will overtake North America as the world's single-largest LCD television market,' Hsuan said.

He pointed out that inventories of televisions and monitors had declined to healthier levels by the end of last year. 'We believe this will stabilise prices in the near term,' he said.

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TPV makes Philips LCD televisions on the mainland

The company shipped out 14.8 million LCD televisions worldwide last year, an increase over 2009 of: 55.6%