02.13.2001
MTI EPS score comes in below expectations

• Telecommunications transmission equipment maker Microelectronics Technology Inc. (MTI, 2314 'Tai Yang') reported a 2000 EPS of NT$2.73, lower than the NT$3.01 originally forecast. The disappointing result is due mainly to the company's unwillingness to divest its share holdings in companies hit by US stock market losses in 4Q00.

• MTI forecasts 2001 revenues to grow 50% to NT$7.25b and earnings to reach NT$0.6b for an EPS of NT$2.88.

• The strong revenue growth forecast, outstripping the prediction of 30% overall telecommunications transmission market growth, is made on the back of better economies of scale and product mix. MTI will focus on products with a high gross profit margin, including LMDS and fiber mux.

• We remain concerned about MTI's non-core investments, which are reported to account for over 40% of total profit.

BennyLo@Primasia.com +886-[0]2-2547-8869