03.30.2001
Mitac very bullish in the China shop

• International (2315 'Shen Da') has confirmed Qun Shan (Jiangsu Province) as its second China production base, following reports in the People's Daily that Mitac would set up 8-10 plants there, targeting monthly shipment of 1m PC units. The other production base is in Guang Dong Province.

• Mitac plans to build two plants in the first stage of construction. The two plants will specialize in MB, PCB and assembly. Mass production is expected to start in 1Q02. The company has indicated it will continue to focus on ODM. We consider the Qun Shan investment as positive for Mitac's expansion in the future.

• Other Taiwan system makers are also actively investing in China given its lower costs and huge growth potential. China's PC market is expected to grow around 25-30% this year to 90-100m units in the face of global PC growth slowdown.

• Mitac realized revenue of NT$47.3b in 2000, up 56% YoY, and net profit of NT$1.8b, a 4% rise YoY. Last year, PC shipment of around 10m units accounted for 7% of global PC output. The company will issue a 10% stock dividend and 5% cash dividend.

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