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Corning: Barclays Sees Boost From China TV Subsidies

Post Time:Mar 17,2009Classify:Industry NewsView:275

The LCD flat-panel sector is seeing some strengthening in demand from a new program by the Chinese government to subsidize the purchase of TVs and other appliances by rural residents of the country, Barclays Capital analyst C.J. Muse notes in a research note.

According to the English language Web version of The People’s Daily, “A subsidy of 13% of the purchase price will be granted to rural residents buying motorcycles and home appliances such as color TV sets, refrigerators, washing machines, cell phones, computers, water heaters and air-conditioners, for which 20 billion yuan has been set aside.” The 20 billion yuan subsidy is equal to about $2.9 billion.

Muse today notes that flat-panel players LG Display (LPL), AU Optronics (AUO) and Chi Mei Optoelectronics are the biggest beneficiaries of a pick up in demand. But he also sees benefits for Corning (GLW), and today upped his estimates on the LCD glass maker. For 2009, he goes to 58 cents, from 50 cents; for 2010, he now sees $1.12, up from $1.

Meanwhile, ThinkEquity analyst Vijay Rakesh repeated his Buy rating and $14 price target on Corning this morning. He says March TV sales so far have “improved slightly on modest restocking and promotions,” tracing better than expectations. He says there are shortages of some components in the TV supply chain, and that 32-inch panels are on allocation. Rakesh contends that “current trends point to upside to Corning’s March-quarter guidance of down 20%-25% glass volumes.”

Despite the positive comments, GLW is down 10 cents, or 0.9%, to $11.61.

Source: Brrons.comAuthor: shangyi

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