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 The shares were down 13.6 percent at 690 yen at the midday
break. That was 23 percent lower than the stock's initial public
offering price of 900 yen.
Japan Display cut its operating profit expectations to 27.20
billion yen ($266.58 million) from 30.4 billion yen for the year
ended March 31, citing lower orders than expected. It left its
net profit estimate unchanged, pending calculations of taxes.
The company said on Friday that its sales had come in 4 billion
yen lower than anticipated after one customer's order missed the
deadline for the end of the year and the company missed some
orders from mid-tier smartphone makers after wrangling over
prices as the market price dropped.
"The revision was surprising. They put out guidance just a month
ago, it makes you ask whether they knew about this then. It
gives a bad impression with their IPO so recent," said Yasuo
Sakuma, a portfolio manager at Bayview Asset Management in
Tokyo.
A spokesman for Japan Display said "taking into consideration
the special market conditions immediately after an IPO we
decided to make the announcement now."
Japan Display's IPO of $3.3 billion suffered a disappointing
debut on the Tokyo stock exchange on March 19. The shares
slipped 15 percent on their first day of trade.
Market participants said unfavorable market conditions were a
significant factor but also pointed to weak appetite for new issues. They also
cited concerns about earnings potential in the highly competitive display
market.
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"It's the No. 1 maker of mid- and small-sized panels but it's not
stable. It's a rapidly developing field where, like TVs, the
technology gets outdated fast. However, now it seems that the
business is not that feasible, it's easy to discount (the shares),"
said Sakuma.
Before its market debut, Japan Display had been lauded for bucking
expectations to become the world's leading maker of smartphone
screens, turning around the loss-making display units of Sony Corp,
Hitachi Ltd and Toshiba Corp in a rare success for a
government-funded restructuring effort.
The company also makes displays for Apple Inc and has been tapped
along with Sharp Corp as a panel supplier for the iPhone 6. Sources
say the handset will be offered in two versions, one with a 4.7 inch
screen like the iPhone 5 and another with a 5.5 inch screen, a boon
for panel makers like Japan Display.
($1 = 102.0350 Japanese yen)
(Additional reporting by Dominic Lau; editing by Ryan Woo)
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