TPK Stock Increases as Profit Exceeds Analyst Estimates

TPK Holding Co. (3673), a maker of touch- screen panels, surged to the highest level in more than five months in Taipei trading after second-quarter profit beat analysts’ estimates.

The stock jumped by the 6.9 percent daily limit to NT$381.50 as of 11:33 a.m., poised for the highest closing price since March 5. Taiwan’s Taiex index fell 0.1 percent.

TPK posted second-quarter net income of NT$2.94 billion ($98 million), the Taipei-based company said in an e-mailed statement after the market’s close yesterday. Analysts projected NT$2.79 billion, according to the average of 12 estimates compiled by Bloomberg.

Fubon Securities Co. raised its rating on the company to neutral from reduce and increased the share-price estimate by 20 percent to NT$330 after the results. The stock is expected to outperform in coming months, given strong demand and a favorable pricing environment, Jeff Pu, an analyst at Fubon, wrote in a note today.

“In the second half, we expect TPK to ramp up its mid- and large-sized products for low-priced tablets and Windows 8 notebooks, offsetting the shortfall in the iPhone and iPad,” Pu said. “The pricing environment appears to be favorable because of supply tightness as the result of a short-term demand surge.”

The company, a supplier to Apple Inc., is set to gain market share on Windows 8 touch panels, Deutsche Bank AG said in a report. Higher entry barriers for large-size touch-panel production is a strong positive for TPK, according to the brokerage, which maintained a buy rating and has a price estimate of NT$560.

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