06.06.2001
Wintek sales continue to linger around lower level

• Wintek (2384 'Sheng Hua') reported May revenue at NT$448m, reflecting a 5% growth MoM and 20% decline YoY. Accumulated sales in the first five months decreased 26% YoY to NT$2.03b, missing Wintek's 2001 sales target of 29%. We believe the decline was caused by industry slowdown in handset demand and inventory correction.

• Today, Phillips indicated that global handset inventory adjustment would continue until 3Q01. This could be bad news for Wintek, as Philips is a strong market indicator.

• Last month's revenue for another STN-LCD maker, Picvue (2333 'Bi You') is expected to decline to the lowest monthly level this year. The company internally estimates sales in May will be around NT$400m, a 24% MoM and 11% YoY drop. We believe the sales slide was triggered by decreased orders from major clients Palm and Handspring. We expect the sales rebound to occur in 4Q01.

• VB Primasia Opinion: We see Picvue as still somewhat overvalued given its present dim prospects, and believe Wintek's share price is overvalued based on our 2001EPS forecast of NT$0.89.

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