03.23.2001
Ambit and Alcatel relationship getting serious

• Ambit (2386 'Guo Dian') and Alcatel (US) are continuing to forge stronger ties after winning the Chunghwa Telecom (2412 'Chung Hua Dian') ADSL outsourcing contract last week.

• Ambit is reportedly negotiating the supply of power supply modules and switch equipment to Alcatel. Ambit currently supplies ADSL modems to Alcatel.

• Alcatel yesterday signed a long-term agreement with China Telecom (China) to provide DSL infrastructure and devices. We believe Ambit will indirectly benefit from the deal.

• We expect Ambit's revenue to grow 50% in 2001 to NT$18.0b, for EPS of NT$9.03. We recommend ACCUMULATE Ambit on a target price of NT$207, or P/E of 23x.

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