05.15.2001
Tecom ties up with Uniden on wireless and wire-line equipment

• Tecom (2321 'Dong Xun') has announced a joint venture with Uniden, a Japanese cordless telephone giant, to set up a network system company in the US The joint venture will focus on wire-line and wireless telephone equipment for the operator, SOHO and corporate markets. The company expects to launch thirteen new products in 2001.

• Original capital for the venture is US$3.0m, with Tecom contributing 10%. It is expected to bring in revenue of NT$22m in the first year, and targets US$100m for the first three years.

• We think this is a good move for Tecom. Uniden is a world class client, which could help Tecom expand into the US market. Also, the venture could see Tecom lowering the production ratio on handsets in the longer term. Handset sales, which are continuing weak in 2001, currently account for around 60% of total revenue.

• VB Primasia Investment Opinion: We hold NEUTRAL on Tecom in the near term as the company relies on handset sales for a high proportion of revenue.

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