05.16.2001
Amtran ebullient about 2001 prospects, upgrades forecasts

• Top-tier LCD monitor maker Amtran Technology (5405 'Rui Xuan') reported pretax profit in the first four months of NT$165m, for EPS of NT$1.02. The figure is up 151% YoY, with growth coming on the back of increased revenue and improved gross margin.

• Amtran expects LCD monitor shipment in May to reach around 60k units, a monthly record high, boosted by the addition of new US PC clients. The company indicates LCD shipment in 3Q01 will continue to rise sequentially. Amtran has consequently raised 2001 LCD monitor shipment target to 600k from 470k. Revenue from LCD monitors is expected to account for around 70% of total revenue in 2001.

• Yesterday's shareholders' meeting approved a 20% stock dividend and 10% cash dividend. In addition, the company has completed a NT$1.4b convertible bonds issue. The proceeds will be used for the installation of a new LCD monitor production line and for building purchase.

• VB Primasia Investment Opinion: We have adjusted our own 2001 earnings forecasts. Our adjusted 2001 EPS estimate is revised up to NT$3.47 from NT$2.87 on more LCD monitor shipment and better than expected gross margin. The current P/E ratio on our adjusted 2001 EPS is around 13.5x. We upgrade our recommendation on Amtran to ACCUMULATE from Hold and set a target price of NT$56.

MarthaChen@Primasia.com +886-[0]2-2547-8878