Page 13 - 2016 CPT Corporate Social Responsibility Report Download
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CPT operations are managed and controlled by Tatung           its position as a key supplier in the small and medium-sized panel                                   Voice of the Stakeholders                                                11
Co. (shareholding ratio of 8.46%). In 2016, the CPT plants in        market.
Taiwan were exempt from taxes due to their losses and did not                                                                                                             Investor: Mr. Liu                                                        Company profile
receive any financial assistance from the government. CPT TPV               CPT adopted the following business strategies to achieve its
Optical (Fujian) Co., Ltd. and CPTF Visual Display (Fuzhou)          target of a total shipping volume of 250 million units in 2017:                                             The fact that the CPT business operations took a turn for the
Ltd. received real estate tax exemptions from local governments                                                                                                           better in the second quarter of 2016 deserves praise. The net value
amounting to RMB 595,000.                                               1.	 Smartphone and tablet computer panels: In addition to the                                     and stock price increased significantly, which clearly indicates that
                                                                            enhancement of yield rates and cost competitiveness of                                        CPT’s product mix adjustment strategy is correct. Last year, the
       The supply and demand situation for small and medium-                mainstream resolution (HD/FHD) products, the official                                         demand for small and medium-sized panels exceeded the supply. CPT
sized panels in 2016 can be described as follows: The growth of             initiation of mass producing the new 6th generation                                           was able to seize this excellent opportunity to increase the revenues
panel production capacities was inhibited by the decommissioning            production line of Mantix Display Technology in Putian                                        and profits derived from small and medium-sized panels. The
of old TFT production lines or the conversion to new                        City, Fujian Province, China, an investment project of CPT                                    automotive display panel business unit also exhibited stable growth.
technologies in line with active adjustments of capacity portfolios         Technology (Group) [a subsidiary of CPT], is expected to                                      As external investors, the gradually improving financial statements
by the panel industry as well as force majeure events such as the           increase the group’s market share in the third quarter in the                                 give us a glimpse of the dedicated efforts of the CPT management
earthquake in southern Taiwan in early 2016. In the second half             field of mid and high-end smartphones. This strategy is also                                  team.
of the year, small and medium-sized panels were in short supply.            expected to enhance the competitiveness of products with
A situation of demand exceeding supply, especially in the field             new technologies such as in-cell touch and on-cell touch.                                            We have gleaned from research reports by market analysis
of smartphone and tablet panels, helped increase the profitability                                                                                                        organizations and financial news coverage that the Korean panel
of CPT products and improved overall business performance.              2.	 Automotive displays and industrial niche products: In                                         industry has shifted its focus to OLED, Chinese panel manufacturers
Furthermore, the strategic sale of the company’s equity stake               response to the growing demand of displays for IoV and                                        are constantly expanding their TFT production capacities, and
in Prima and Giantplus strengthened the financial structure,                energy vehicles, the company is actively engaged in the                                       Taiwanese competitors are actively adopting high-end and high
enhanced shareholder rights and interests, and consolidated                 development of instrument cluster, central console, and                                       added value strategies. The panel industry is characterized by fierce
operations to achieve increased competitiveness. In 2016, CPT’s             rearview mirror applications. In addition to the continued                                    competition. We hope CPT will continue to improve its financial
consolidated net revenue amounted to NT$ 33.07 billion and                  increase of before market and FFS wide viewing angle                                          performance and identify competitive advantages that will ensure
the company recorded gross profits of NT$ 5.21 billion and a                product shipping ratios, the company also develops total                                      its survival in this industry. In the field of new technologies, such
gross profit margin of 15.8%. Net operating losses and after-               solutions. In the field of industrial niche applications, the                                 as Oxide and AMOLED, we expect continued progress and growth
tax net losses equaled NT$ 1.4 and 0.895 billion, respectively.             company maintains a firm grasp of business opportunities                                      on the part of CPT in 2017. We also expect the company to enhance
Losses decreased by NT$ 7.5 billion (90%) compared to the                   in the areas of IoV, smart factory, and smart home to                                         investment values.
previous year as a result of active operational improvements.               strengthen its client structure and gain the ability to provide
CPT continues to focus on the optimization of product mixes of              customized and high added value products.                                                     Investor: Ms. Guo
smartphone, tablet computer, automotive display, and industrial
niche applications and actively develops touch technologies that     Shareholder ratio (shareholding ratio)                                                                      CPT has faced a lot of adversity in its operations in the panel
support these applications. The total shipping volume of small                                                                                                            industry. As investors, we sincerely hope that CPT will be able to
and medium-sized panels and large-sized panels in 2016 reached           Shareholder                        Others                  Foreign Institution  Treasury  Total  turn losses into profits. We saw that the panel market heated up
372 million and 940 thousand units, respectively. In the field of           Structure Government Financial  Juristic  Individual And Foreign              Stock           slightly last year. The fact that small and medium-sized panels were
smartphone panels, the profit and value oriented order acceptance                                           Person                                                        in short supply led to higher revenues and profits for CPT. We also
strategy is showing positive effects, resulting in a simultaneous    Year Institution Institution                                        Nationals                        witnessed efforts by CPT to improve its corporate competitiveness
increase of revenues and profits. CPT accounted for 6% of the                                                                                                             and corporate structure through the raising of capital, activation of
global shipping volume. In the field of tablet computers, CPT has    2014  0.00 0.00                        37.00 54.28  8.72                            0.00 100.00      assets, and adjustments of equity strategies, which is good news for        Chunghwa Picture Tubes Corporate
maintained its second-place ranking with a market share of 21%.                                                                                                           the company’s business operations. However, the market is highly         Social Responsibility Report
As for automotive displays, the company has been able to achieve     2015  0.00 0.00                        37.00 54.61  8.39                            0.00 100.00      volatile. We therefore hope that CPT will be able to identify its
its goal of 13 million shipped units (global market share of 10%)                                                                                                         competitive advantages and differentiate itself from its competitors.
due to its dedicated efforts and achievements in the emerging        2016  0.00 0.00                        36.97 55.23  7.80                            0.00 100.00      For instance, the automotive display market has a high growth
automotive market of China in 2016. The shipping volume of                                                                                                                potential due to the rising demand for energy vehicles and digitized
before market products which are characterized by high profit        Consolidated financial statement (Unit: 1000NTD)                                                     displays. CPT must make an effort to maintain its leading market
margins continues to rise. Revenues derived from these products                                                                                                           share. Despite the fact that industry and niche applications are
account for over 40% of the total automotive display revenues.       Net operating revenue                     2014         2015                             2016         characterized by small-scale production of a large variety of products,
Customer bases for industrial niche products are gradually           Operating costs                        56,391,377   47,319,711                      33,069,645       their contribution to gross profits is significant. The smartphone
expanding and development focuses on diversified business            Gross operating profit (loss)          -50,013,775  -47,609,448                     -27,860,267      and tablet market, on the other hand, is characterized by significant
opportunities.                                                       Operating Losses                       6,377,602     -289,737                        5,209,378       fluctuations and fierce price competition. We are aware of the fact
                                                                     Gain (Loss) before income tax          -2,109,671   -7,876,775                      -1,402,976       that the CPT joint venture Mantix Display Technology is making
       Looking ahead to the industry and market conditions of                                               -3,317,826   -7,446,671                                       active preparations for the initiation of mass production in the second
small and medium-sized panels in 2017, CPT will continue to                                                                                                237,290        half of the year. We expect this move to enhance the competitiveness
face an arduous challenge of supply exceeding demand as a                                                                                                                 of the whole group.
result of increased competition caused by continued expansion        Net gain (loss) attribute to :         -3,981,524   -8,761,984                      -1,776,479
of new production capacities in the industry and mass production     Shareholders of the parent
of new LPTS and OLED products. In addition to the adoption
of lean production approaches, CPT must rely on advanced             Manpower costs                         9,151,875    9,396,346                       5,988,446
product technologies and increased added value to achieve
constant improvements in the field of profitability, and maintain    Note: Manpower costs include salaries, labor and health insurance fees,
                                                                     pension fund contributions, and other manpower expenses Earnings
                                                                     distribution includes legal reserves, cash dividends, and employee
                                                                     bonuses. No earnings and employee stock option certificates were
                                                                     distributed between 2014 to 2015. Employee and director/supervisor
                                                                     compensations were not estimated due to the fact that CPT recorded net
                                                                     losses in 2016.
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