07.25.2001
Ritek rumor far fetched

• Development: The press has rumored that Ritek may be facing bad debt of NT$3bn from a European client.

• Analysis: NT$3bn is about one third of Ritek’s total A/R as of end1Q01. This would suggest that almost all A/R from Europe is non-collectable. In our view, we are doubtful on the credibility of this rumor.

• Primasia View: Today’s down-ceiling price is very close to Ritek’s estimated BVPS of around NT$39, which should act as a substantial support level. Accordingly, we have upgraded our recommendation from Hold.