02.07.2001
Toshiba NB PC orders not finalized

• Compal (2324 'Renbao') has stated that it has yet to receive notice from Toshiba (Japan) to reduce NB PC shipment. The company is attempting to counter reports that Toshiba has decided to stop placing OEM NB PC orders with Taiwan makers.

• Compal is presently the only Taiwan NB PC maker for Toshiba's OEM orders, with Toshiba one of Compal's three major customers. 2000 NB PC shipment to Toshiba was around 5.5m, accounting for 30% of Compal's total output. The company's 2001 NB PC shipment target of 2.6m included an estimate of a 0.8m Toshiba order. Consequently, Toshiba's order is significant in Compal's 2001 operating profit.

• Although the company has announced an increase in Pocket PC and handset orders, we expect NB PC to be the major revenue contributor in 2001. We will not revise down our 2001 forecast at this moment, and will continue to monitor this situation closely.

• Compal's preliminary 2000 net profit was NT$5.98b (EPS of NT$3.84), slightly lower than our forecast of NT$6.13b (EPS of NT$3.94). This difference was mainly due to a lower than expected gross margin in 4Q00. The board of directors has decided to pay an NT$0.05 cash dividend, and a 0.25 stock dividend per share.

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