03.28.2001
DbTel initiates its move into ODM

• DbTel (5304 'Da Ba') is finally making the move to ODM from OEM. Reports in the local press indicate that, from April 2001, DbTel will be Motorola's (U.S.) ODM partner. DbTel expects handset shipment at a level of between 2-3m units during 2001.

• DbTel has slated April or May 2001 for the introduction of a handset selling under the company's own brand into the Chinese and Taiwanese handset markets. However, we remain concerned about the extent of popularity of such a low-profile brand name handset in China.

• The company forecasts 2001 handset shipment of 7.5m units, up 67% YoY.

• We expect that the move to ODM from OEM will allow DbTel to improve its profit margin to 11-14% from 8-9%. Further, we believe that this move paves the way for more ODM business for DbTel in the future.

BennyLo@Primasia.com +886-[0]2-2547-8864