05.16.2001
ACM not in celebratory mood this year

• We have confirmed with ACM (2352 'Ming Ji') that Philips was recently removed from the company's client list. It also indicated that GPRS handset shipment may be postponed to 1Q02, as global GPRS infrastructure will remain inadequate through 2001. As a result, we expect ACM to ship 5.5m units in 2001. The company's original forecast was 6m.

• ACM says demand for computer related products (except LCD monitors) has slowed significantly in 2001. It also admits that DLP projectors are facing competitive pressure from LCD projectors.

• The company confirmed it has a deal with an undisclosed US company to make colour laser printers in 2H01. Trial shipment is in July, with target shipment of 100-200k units in 2001.

• VB Primasia Investment Opinion: We predict handset shipment will come in lower than expected in 2001, and anticipate demand on computer related products (except LCD monitors) will remain flat. Shipment of new products will realise only small volumes this year. Meanwhile, ACM is trading at an unattractive P/E of 25x recurring 2001 EPS of NT$1.58. We recommend HOLD ACM. We are positive on the company's handset and LCD monitor businesses in the long run.

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