07.19.2001
Uninspiring prospects for Picvue

• Development: Picvue reported 2Q01 sales plunged 42.5% QoQ with gross margin declining to 13% from 18% achieved 1Q01. The firm expects revenue in 3Q01 to remain flat QoQ but anticipates 4Q01 sales to recover.

• Analysis: As major clients Palm and Handspring correct inventories, we have revised down Picvue LCD module shipment by 21%. Correspondingly, we will cut our current sales forecast by 27% and profit by 44% for full year 2001.

• Primasia View: Despite limited downward pressure on stock price, we remain concerned about absence of a growth catalyst in near term. Outlook for new products still bleak, thus we remain neutral on stock with negative implications

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