05.29.2001
GVC handset shipment resilient in May, but tougher times await

• GVC Corp. (2322 'Zhi Fu') expects handset shipment to reach around 200k units in May, bringing in revenue of NT$500-600m. Strong demand from Chinese clients is behind the optimistic forecast. The company also claims it will be in talks with Ericsson in 3Q01 on next year's handset shipment schedule. GPRS handset shipment to Ericsson is slated for 4Q01.

• While the company will continue to focus on its relatively reliable Chinese clients in 2H01, we remain concerned about GVC's other ODM handset customers in 2H01. GSM handset orders from LG (Korea) may come in lower than expected, as LG is a new GSM client. Also, we are doubtful as to whether GPRS will be ready for shipment in 4Q01 as originally planned since it is highly unlikely that GPRS infrastructure will be up and ready by this time.

• VB Primasia Opinion: We remain NEUTRAL on GVC pending further developments.

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