05.02.2001
Picvue unmatched in STN-LCD in 1Q01

• Picvue reported 1Q01 net earnings of NT$362.3m, for EPS of NT$0.61. Net earnings were up 340% YoY on the back of resurgent sales on STN-LCD modules used in PDAs, profit margin improvement and increased investment disposal. 1Q01 revenue surged 80% YoY, while gross margin rose to 18% from 10% in 1Q00. Picvue was the top performer in terms of EPS in 1Q01 among all local STN-LCD makers.

• Picvue forecasts revenue of NT$8.95b (27% YoY increase) and net profit of NT$0.83b (60% YoY increase). Our adjusted revenue and net earnings forecasts are NT$8.82b and NT$0.87b, respectively. Although the company predicts growth for both revenue and bottom line the figures are well below previous estimations, affected by slower than expected global PDA growth.

• Going forward, Picvue's revenue will be impacted by PDA client Palm's inventory adjustment from April. In addition, in 2Q01 the company will book a one-time loss of NT$431m on the closure of its line producing glass used in color CRT. We predict 2Q01 will be a tough period for Picvue. We maintain our earnings forecast and recommend HOLD.

• Another STN-LCD maker, Wintek (2384 'Sheng Hua'), reports 1Q01 revenue of NT$7.0b (8% YoY growth) and net earnings of NT$0.55b (23% YoY decline). 1Q01 EPS was only NT$0.02. Wintek's STN-LCD panels or modules are mainly used in handsets. Affected the global slowdown in handset growth and with orders from major client Motorola decreasing, 1Q01 revenue fell 24% YoY. Wintek predicts 2Q01 revenue will remain flat compared to 1Q01. We retain our NEUTRAL rating on Wintek.

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