05.07.2001
ACM strikes alternative approach to China market

• At its latest investor conference, ACM (2352 'Ming Ji') will place greater emphasis on the China market in 2001. This is despite the fact that the company is still yet to obtain a license to sell its own-brand handsets there.

• Lacking such a license, ACM will focus on Chinese ODM clients while seeking alliances with head-end equipment makers to market its handsets through a 'one-stop shop' arrangement with local operators. We see this as a sensible strategy in the effort to secure a share of the China market before a license to sell handsets directly can be obtained.

• ACM forecasts overall handset shipment of 6m units in 2001. We believe this will prove a difficult target to achieve given expected continuing weakness in the global (ex-China) handset market this year and the postponement of the rollout of its GPRS handset by another quarter to 1Q02.

• Given the overall lack of visibility in the handset sector, we are currently NEUTRAL on handset plays.

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