06.08.2001
Ritek Group to acquire four seats on Lead Data

• The Chairman of Lead Data (2443 'Li Die') has confirmed that Ritek Group will acquire four chairs on Lead Data's board of directors on June 22, when the company's board members are re-elected. Three of the group's companies - Ritek (2349 'Lai De'), Prodisc (2396 'Jing Die') and Giga Storage (2406 'Guo Shuo') - will take seats. The alliance will boost the total CD-R capacity of Ritek Group to over 60% of total Taiwan capacity and 48% of global capacity.

• Ritek is looking to personal storage media and optical components as strong future growth drivers. The company plans a dividend for 2000 of 30% in stock and 5% in cash.

• VB Primasia Investment Opinion: We believe the alliance will strengthen Ritek's bargaining powers with its suppliers and intellectual property holders, to whom Ritek pays royalty fees. The move will entrench Ritek’s monopoly status in the local CD-R industry. We see the tie up as very positive for the CD-R industry and for Ritek in particular. The company is moreover very well positioned for future growth. We maintain our BUY recommendation on Ritek with a target price of NT$128, or 20x 2002 EPS forecast of NT$6.40.

VincentChen@Primasia.com +886-[0]2-2547-8868