AU shares hit over 1-mth high after solid Q1 profits

TAIPEI, April 23 (Reuters) - Shares of Taiwan's AU Optronics Corp (2409.TW: Quote, Profile, Research, Stock Buzz) jumped more than 3 percent to a more than one-month high on Wednesday, a day after the world's No.3 LCD maker posted its second best quarterly profit due to stronger demand for displays. AU shares rose 3.3 percent to T$60.30 ($2) about 50 minutes into trade, leading the opto-electronics sub-index up 1.6 percent and defying the main TAIEX's 0.5 percent fall. Its U.S.-listed shares (AUO.N: Quote, Profile, Research, Stock Buzz) ended up 1.3 percent on Tuesday. After reporting a first-quarter profit that beat market expectations, AU said it expects shipments and prices of PC and TV panels to be mixed in the current quarter, with PCs faring better. (Click [ID:nTP255025] for details)

Citigroup raised its 2008 and 2009 earnings per share forecasts on AU by 39 percent and 17 percent, respectively, after the results.

"The company posted a strong set of results for the first quarter. EPS of T$3.4 was at least 40 percent higher than the high end of the consensus forecast," Citi analyst George Chang wrote in a note on Tuesday. "Aside from shifting to the large sizes, we believe AU has also done a good job in moving toward the higher-premium products," he said.

For example, AU is the largest panel supplier to Apple's (AAPL.O: Quote, Profile, Research, Stock Buzz) new MacAir laptops, which will have a better premium than standard panels, said Chang, who maintained a "buy" rating on AU. Based on a price/book ratio of 2.1 times, Citi put a target share price on AU at T$88.00, implying 46 percent upside from the current level. (US$1=T$30.3) (Reporting by Baker Li, Editing by Ken Wills)