Targeting Mini/Micro LED, AUO Accelerates Transformation and Upgrading

On August 19, the panel giant AUO convened a shareholders meeting. During the meeting, Chairman Paul SL Peng suggested that, regarding shareholders’ concerns over the stock price and analysts’ ratings of the panel industry, AUO could not affect its stock price, but the Taiwan-based panel manufacturer is striving to develop “biaxial transformation” (i.e., the Go Premium and Go vertical projects) strategies to ensure sustainable and stable profitability.

Mr. Peng emphasized that because the panel industry is highly sensitive to changes in the economic cycle, panel businesses are often rated based on their PB (price–book ratio) ratio instead of the PE (price-earnings ratio) ratio that is more common in other sectors. When the influence of the economic cycle reduces, he believed that the market will rate the panel industry using a more reasonable assessment approach.

Regarding cash management, Peng specified that because operations have been going well recently, the company has quickly accumulated cash. AUO will continue utilizing its resources properly to facilitate biaxial transformation. Concerning the Go Premium project, the company aims to increase investments in high-end display technologies (e.g., next-gen Micro LED), whereas the Go Vertical project focuses on establishing alliances with valuable companies, thereby extending AUO’s value chain to downstream, systems, and solutions.

Image source: PAIXIN.COM

Due to the pandemic last year, transportation, production, and supply chains were once suspended, which caused a plunge in orders. Nevertheless, driven by the stay-at-home economy, panels have been in short supply, enabling AUO to revive its business from an all-time-low at the beginning of the year to the later quarterly increases.

By adopting epidemic-prevention measures and flexibly adjusting production capacity while ensuring the supply chain can meet customer needs, AUO generated consolidated revenue of NTD 270.96 billion in 2020, a slight increase of 0.8% compared with the 2019 revenue. The company reported a net operating profit of NTD 2.08 billion, net profit attributable to owners of the parent company of NTD 3.38 billion, and EPS of NTD 0.36, pulling the panel provider out of the red.

In 1H21, AUO’s profits skyrocketed, posting a net profit attributable to the parent company of NTD 31.3 billion along with an EPS of NTD 3.3, hitting a HoH record high.

As for R&D of new technologies and products, AUO has achieved mass production of its Mini LED products and further taken the lead by launching a 9.4-inch flexible Micro LED display featuring the world’s highest resolution. The company successfully transferred more than 5.5 million Micro LEDs to an LTPS flexible backplane, realizing high dynamic contrast and high color saturation. The Micro LED model is suitable for vehicle mounted products and will be subjected to mass production as per clients’ shipping schedules. (Source: MoneyDJ)

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