06.12.2001
Elusive Rebound

• Team Young (5345 'Tian Yang') has become one of three qualified suppliers (two Japanese manufacturers) of passive components (MLCC) for SONY PS2. Shipment might start in July, boosting monthly sales by NT$25m. The company has also become a qualified supplier for SCI, TOKO and MESA.

• 1Q01 accumulated revenue was NT$230m, a 52% decline YoY. We believe Team Young will have less bargaining power based on higher inventory levels of the passive components sector. The average market price of MLCC has fallen nearly 40% since 1Q01, as weak demand for mobile phones puts pressure on the bottom price.

• VB Primasia Investment Opinion: Team-Young's May revenue came in at NT$75m, a 58% decline YoY. Unless the company significantly reduces costs with BME (a new production process), we estimate it will have difficulty breaking even until at least the 4Q01. We recommend a WEAK HOLD on this counter.

JesseLin@Primasia.com +886-[0]2-2547-8871