05.08.2001
ACM handset shipment starting to pick up momentum

• Upstream electronics manufacturers, including PCB and connector suppliers, have indicated that shipment of components to local handset players is expected to bottom out in 2Q01. Handset shipment is expected to pick up in 3Q01.

• ACM (2352 'Ming Ji') estimates handset shipment in April to be around 600k units and expects sales momentum to continue into 2Q01. While we agree ACM's shipment will increase in 2Q01 through year-end, we understand the majority of handsets going to Motorola in 2001 will be low-end GSM models.

• VB Primasia Investment opinion: We remain concerned over the gross profit margin on handsets and whether ACM can achieve its target of 12-14% this year in the face of falling component prices. We are NEUTRAL on this counter.

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