02.27.2001
Lite-On Tech to move into LCD module production

• On a company visit, Lite-On Tech (2346 'Yuan Xing') stated 2001 revenue will increase by around 30% YoY to NT$35b on monitor shipment of 7m this year, versus 5.4m in 2000. The company is targeting LCD monitor shipment of 600k in 2001, up from 300k last year, mainly exporting to Japan.

• Lite-On won HP and Gateway CRT monitor orders in 2H00. Shipment to HP started in 3Q00 and to Gateway in 1Q01. February revenue on monitor output is targeted at NT$2.0b, a flat result compared to January's low comparative base of NT$1.66b. Lite-On estimates shipment will start to pick up in 2Q01.

• The company estimates 2000 EPS at around NT$5.27, NT$1.60 from the monitor sector and the remainder mainly from stock divestment and investment income on 72%-owned subsidiary Lite-On IT (unlisted). Gross margin on CRT monitor and LCD monitor is currently a steady 11-12% and 7-8%, respectively.

• Lite-On IT forecasts 2001 net profit of NT$1.97b for EPS of NT$10.8, up 40% YoY. The company plans to list on the Tiger board in May at around NT$73. Lite-On Tech's original investment price on Lite-On IT was around NT$7.6.

• In order to boost profit margin on LCD monitors, Lite-On Tech plans to move into LCD module assembly and to directly integrate components into LCD panels to cut costs. It plans to invest around NT$500m in a Shanghai assembly plant for this purpose. Lite-On Tech is negotiating with two Japanese TFT-LCD panel makers and expects to seal a deal in 2H01. Initial LCM output from the Shanghai plant on this contract will be 50k per month.

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