LCD Maker’s Outlook Brightens on Overhaul, Sector Rebound

Display maker BOE Technology Group Co. Ltd. said its profit more than tripled in the third quarter, following a sector uptick and reforms to make it more responsive to the rapidly changing market.

Shares of the maker of liquid crystal displays (LCDs) rose 7% in Thursday trading in Shenzhen after the company issued the bullish report, which extended a strong start to the year.

BOE said it expects to post a profit of between 1.9 billion yuan ($286 million) and 2.2 billion yuan for the three months through September, compared with 657 million yuan a year earlier, according to an announcement to the Shenzhen stock exchange. The company previously reported a 4.3 billion yuan profit in the first half of the year, reversing a 516 million yuan loss in the first half of 2016.

BOE said that since the start of this year it has been taking steps that will allow it to move more quickly into emerging product areas.

“Following our transformative actions and upgrades, and raising of our ability to innovate, our traditional products have maintained their market share,” the company said in a statement. “At the same time, we have been reaping early rewards from the development of new applications.”

BOE said it has been boosting its management, product yield rates and product quality throughout the period, assisting in the development of its value-added products.

“At the same time, the outlook for the broader semiconductor display industry has been relatively better than the same time a year ago, allowing overall profits to stabilize at a relatively high level,” BOE said. “Thus business has improved quite sharply in the first three quarters compared with a year earlier.”

Rising panel prices have boosted the entire panel-making industry, which is prone to cycles. The latest uptick may have been a factor in BOE’s announcement last month that it would partner with the local government in the interior city of Wuhan to build a 46 billion yuan panel-making facility.

Contact reporter Yang Ge (geyang@caixin.com)