02.06.2001
Wintek to pay 4 for 10 stock dividend

• Wintek (2384 'Sheng Hua') yesterday announced at its board of directors' meeting a stock dividend of 4 shares for every 10 existing shares held. Based on the company’s preliminary 2000 EPS of NT$2.7 (in line with our forecast of NT$2.67), a proportion of 2.3 stock dividends will be contributed by earnings, with the remaining 1.7 stock dividends to come from capital reserves.

• Wintek plans to issue additional 65m new shares to raise around US$100m, with an issue price estimated at around NT$50. Due to stock price weakness, Wintek cancelled its ADR issue in 4Q00. The company has slated US$20m of the proceeds for investment in the mainland, with the remaining to be used for overseas purchases.

• We expect most of Wintek's 2001 profit to flow from handset STN-LCD, and forecast a 2001 EPS of NT$3.2. With the present high market prices, and the disclosure of the stock dividend news, we now revise our recommendation down to HOLD from the previous ACCUMULATE.

MarthaChen@Primasia.com +886-[0]2-2547-8878