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AUO dividend official and more +2

12:41 22-Jun-16


AU Optronics has officially declared its dividend.  Shareholders who own AUO before the ex-date of July 7th will receive 10.858 cents per ADR.  That's a 3.74% yield, at current prices. 

As mentioned yesterday, AU's re-entry into solar represents another wild card for real share growth, to go with a potential display investment from Apple.  So far I've seen no word on the cost of these solar panels, and that will, of course, be critical.

On the display side, it's quite possible that the end goal will not be purely AMOLED in nature.  AU was probably the first to develop and market hybrid screens and these are seeing more and more research.  Development typically occurs collaboratively in distinct geographical areas, and my guess is that Taiwan still leads by a broad margin.  AU management has maintained a very cautious public stance on AMOLED production and the latest is that Nanoco is finally inkng supply deals in Taiwan for its cadmium-free quantum dot material, which is produced by Dow Chemical. 

Although the Nanoco trades natively on the London Stock Exchange as NANO, and OTC in the U.S. under the symbol NNOCF, I do NOT recommend it, except perhaps as a hedge on LPL.  LG evaluated the technology one and a half years ago, and we know the path it chose.  Word is that Samsung has not been able to make it cost competitive, though that could always change. 

Thus, I think LG Display's television strategy is safe and on track.  My only concern, for LPL investors, is the one I voiced in conjunction with the last UDC report: that LG Group is using internal accounting to depress the internal sales price of panels from LG Display to LG Electronics in order t lower royalty payments.  I can't yet say for sure that such a scheme is happening at all.  If it is, it could be only be temporary measure during the build out, and I would NOT expect it to extend to third party sales in any case.  Nonetheless, this and experience regarding production expansion are the primary reasons I keep saying LPL will require a great deal of patience.