BOE Technology posted a second quarter loss on Friday as global prices for its core TV and PC displays fell, and warned it also expected to post a fifth consecutive quarterly loss in the third quarter.
The Beijing-based arm of tech-to-tourism conglomerate Beijing Enterprises has said it was planning to raise $321 million in a Hong Kong listing as it pushes to catch global rivals Samsung Electronics and LG.Philips LCD.
In China, BOE is one of two firms making the thin-film transistor LCDs (TFT-LCDs) that go into thin-panel TVs and PC monitors, and it is scrambling to catch the faster-expanding rival venture part-owned by Japan's NEC Corp.
BOE posted a loss of 538 million yuan ($66.4 million) in the second quarter compared with a profit of 255.7 million yuan a year ago, according to Reuters calculations from previously announced figures.
Quarterly revenue fell to 2.24 billion yuan versus 2.54 billion yuan in the same period last year.
"There was a great deal of uncertainty in the TFT-LCD market. Global prices fell and our margins sank as a result," the firm said in a statement posted in the Securities Times.
In the first half of the year, BOE said sales to its major overseas markets slipped as domestic sales fell 19.8 percent. Sales to Europe dropped a whopping 90 percent, while sales to Asia and other countries fell 25.5 percent, it said.
BOE attributed its ongoing weak performance to a global slump in the market for thin-film transistor, liquid-crystal display (TFT-LCD) panels, the main component in thin-screen computer monitors and one type of thin-screen TV.
The display panel sector has seen a steep decline in prices since the second half of last year, brought on by the rapid introduction of new capacity and slower-than-expected take-off in demand for thin-screen televisions.
BOE said those tough conditions will hurt third quarter performance, warning it would post a loss from July to September.
"Because of the continued uncertainty in the market and falling prices, we expect to post a loss in the next quarter," it said.
BOE Chairman Wang Dongshen told Reuters in May the company would spend $2 billion building a second production line for TFT-LCD panels by 2007 and was considering an overseas share listing to finance it.
Former TV-parts maker BOE has also been active on the acquisitions front. It completed its purchase of Hynix Semiconductor Inc's flat-screen display unit - the world's ninth-largest liquid-crystal display maker - in February 2003 in one of the largest overseas investment forays by a Chinese technology firm.
The company has also bought 26 percent of TPV Technology, which will become the world's largest maker of computer monitors with its pending purchase of the monitor assets of Dutch electronics giant Philips.
BOE's shares fell 16.5 percent in the second quarter, underperforming an 8.5-percent slide in the broader index.