03.27.2001
Testing times for Askey

• Askey (2366 'Ya Xu') is expected to receive certification for the 3350 cable modem from US Cable Labs at the end of March. Askey expects cable modem shipment to grow substantially after this month.

• In February, Sony, a major client, cut cable modem orders. Askey expects revenue in March to be around NT$0.8b, up 21% MoM.

• Going forward, we remain concerned as to whether Askey can achieve its 2001 cable modem shipment target of 1m; in the first two months, shipment registered only 80-90,000 units.

• Askey claims to have secured a new US client, SA. Orders are only in the trial shipment stage. We expect significant orders to be forthcoming from this new client in 2H01. We also view Sony as continuing to be a stable partner for the company in the future.

• While foreseeing nothing spectacular for this year, we believe by 2002 Askey will be very well positioned in broadband as many current competitors will have fallen to the wayside by then. For the time being, we are NEUTRAL on Askey, which is trading fully valued at 22x P/E.

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