05.02.2001
Four big players report strong EPS scores in 1Q01

• Four major Taiwan communication equipment makers have all reported 1Q01 EPS of over NT$0.80.

• D-Link (2332 'You Xun') booked EPS of NT$0.81 with revenue up 45% YoY, Zyxel (2391 'He Qin') NT$0.84 with revenue growth of 114% YoY, Accton (2345 'Zhi Bang') NT$0.84 on 85% higher revenue YoY and Ambit (2386 'Guo Dian') NT$1.78 with revenue up 15% YoY. --Going forward, we expect Ambit will be the only one of the four to report significantly higher revenue in 2Q01 on the back of ADSL shipment to Chunghwa Telecom (2412 'Chung Hua Dian') which starts in May. We maintain our revised HOLD recommendation.

• We do not expect Accton and D-Link to see revenue increase in 2Q01 from 1Q01, as the inventory problem for global equipment makers lasts into 2Q01. We continue to recommend ACCUMULATE both companies in the long term.

• We forecast Zyxel's 2Q01 revenue at around NT$0.8b-1.0b, short of the 1Q01 figure of NT$1.2b as the emergency contract with Chunghwa dries up in April. We think Zyxel is currently OVERVALUED.

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