05.03.2001
Zinwell not expecting a banner year in 2001

• Communications equipment maker Zinwell Corp. (5409 'Zhao He') forecasts 2001 revenue of NT$3.1b, up 10% YoY, for EPS of NT$2.73, down from NT$3.77 in 2000. This is a conservative forecast. The estimate also excludes potential shipment of new products such as cable Set-Top-Box (STB) and DVR (Digital Video Recorder). While pilot shipment of cable STB (rumoured to be for a Japanese client) is set for 1H01, we expect to see shipment proper in 2H01.

• Zinwell reports 1Q01 revenue of NT$0.62b, a 7.8% slide from 1Q00, leading to EPS of NT$0.59. The company claims poor market sentiment has contributed to the decline.

• Although we are bullish on the STB business in the long term, we do not foresee much appreciable growth potential in STB this year in Europe, Zinwell's major market. Another weakness of the company is its lack of any real exposure in the US, the world's largest cable STB market. Together with limited growth potential on existing mature products such as Low Noise Block (LNB) and passive cable components, we are NEUTRAL on Zinwell for the time being. BennyLo@Primasia.com +886-[0]2-2547 8869

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