08.14.2001
Palmax merger with Compal under scrutiny

• Development: The merger of Palmax (a PDA maker) with Compal has been questioned by a small number of Compal’s shareholders. In response, the stock price declined 3.4% yesterday. Merger was approved by Taiwan SFC and AGM.

• Analysis: We consider this a positive move for Compal as it will aid its entry into the info appliance (IA) segment. The deal will enable it to win more ODM/OEM business in this segment by taking advantage of Compal’s brand name, existing customer base, and greater bargaining power with suppliers.

• Primasia View: We maintain our recommendation due to firm’s solid financials and growth prospects in 2H01.