06.06.2001
Ambit continues to show strength

• Ambit (2386 'Guo Dian') reported slightly disappointing revenue in May, around NT$1.4b, below market expectations of NT$1.5-1.6b. One possible reason is that the market expectation believed ADSL shipments for Chunghwa Telecom (2412 'Zhong Hua Dian') were to begin in early May, but actually shipped at month's end.

• Declining orders from Nortel (US) may be another explanation for the disappointing result, as we believe Nortel will soon drop its DSL business. Ambit's management reiterates it is still confident in achieving the company's shipment target of 2m ADSL modem units in 2001, as their yearly forecast anticipated the possible loss of Nortel business.

• VB Primasia Investment Opinion: We remain positive on Ambit's outlook and believe the bad news has been reflected in the current share price. We recommend HOLD on this counter with a target price of NT$213 or P/E of 24x.

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