AUO launches new layout! Peng Shuanglang: Create a second growth curve and cultivate more little tigers

AUO (2409), a major panel manufacturer, celebrates its 30th anniversary and continues to accelerate its transformation. Chairman Peng Shuanglang said today (17th) that AUO will accelerate the deployment of emerging technologies and create a second growth curve through corporatization of the three major operational pillars, adjustment of traditional panel production capacity and asset activation, and will also cultivate more "little tigers". Zhang Boyi, general manager of AUO, said that the market is expected to have a clear answer before the end of the year as to whether the Zhongke factory will be punished. By then, this wave of asset activation will also come to an end, in order to facilitate the promotion of new layout next year.

AUO held its 30th anniversary sports meeting in Hsinchu today. Peng Shuanglang pointed out at the press conference after the meeting that AUO has experienced profit peaks in the past 30 years and has also faced serious losses and survival challenges. As competition in the global panel industry extends from Japan and South Korea to Taiwan and China, the industrial landscape has changed significantly, and AUO must seek new growth directions.

Peng Shuanglang said that AUO proposed to shift from price competition to value competition as early as 2014. Although the transformation strategy has been continuously adjusted over the past decade, the core direction has always remained unchanged. From the past two-axis transformation to three major operational pillars, this year we will further promote corporatized operations, and the group operations will gradually develop towards a "quasi-holding company" model, making each business unit responsible for revenue, profits and operating performance.

Peng Shuanglang pointed out that AUO is transforming in the direction of light assets, continuing to rectify traditional panel production capacity, closing or transforming uncompetitive production lines, and through "vacating cages and replacing birds", transforming some existing factories into new technology and new product R&D bases, covering applications such as Micro LED, low-orbit satellite antennas, and X-ray sensing, to improve the use efficiency of existing factories and equipment. At the same time, we actively promote the revitalization of land and factory assets, reinvest the funds obtained from disposal into new technologies and new business layout, and accelerate the group's transformation.

In response to the approximately 24 billion yuan investment plan previously approved by the board of directors, Peng Shuanglang clarified that this is not a single-year capital expenditure this year, but a phased investment in line with the development progress of various new technologies and new businesses, showing that AUO's investment focus has gradually shifted from traditional panel production capacity expansion to emerging technology layout.

Peng Shuanglang emphasized that AUO has established a healthier operating foundation after adjusting its operating structure and financial structure in recent years. In the future, it will actively expand new businesses other than displays based on its existing display technology, manufacturing capabilities, customer relationships and supply chain ecosystem, and move towards the goal of stable profits and establishing a second growth curve.

In addition, Peng Shuanglang also proposed cultivating more "little tigers". He said that for subsidiaries that do not belong to the group's three core operating pillars, if their operating scale and profits reach a certain level, they will not rule out planning to go public in the future, such as Xingyao, Yupei Sustainability, etc.

In terms of the progress of asset activation, Zhang Boyi added that AUO hopes to complete the overall assessment of this wave of asset activation before the end of this year and provide clear answers to the outside world so that relevant discussions can come to an end.

He emphasized that asset activation is not simply about selling factories to obtain funds, but starting from the business strategy in the next few years to evaluate which factories are still necessary to retain and whether the old generation production lines are competitive.

As for whether the Zhongke factory, which is of concern to the outside world, will be included in the next wave of asset activation list, Zhang Boyi said that it is still under discussion and has not yet been finalized. He also admitted that relevant issues have been unresolved for a long time, which has caused troubles to investors, customers and employees. AUO will give a clear direction before the end of the year.

As for whether AUO's previous sales of factories can be recognized as disposal benefits within this year, Zhang Boyi pointed out that some of the sold factories still have production lines in operation. The transfer of production lines, factory clearance and delivery must be completed before the relevant transactions can be recognized in accordance with accounting regulations. Among them, the Singapore factory transaction also involves local government review, and the procedures are more complicated than in Taiwan. Even if the buyer and seller have reached a consensus, the actual completion time still depends on the review progress of the competent authorities. Therefore, there is still uncertainty whether the relevant disposal benefits can be recognized this year.