08.23.2001
Compeq indicates bleak outlook for 2H01

• Development: Compeq reported 1H01 revenue of NT$8.1bn and gross profit margin of 12.8%. 1H01 earnings of $1.06bn (EPS of $NT1.14) achieved 44% of its financial forecasts for 2001.

• Analysis: A weaker local currency and material price down by up-stream suppliers contributed to extra gains in 2Q01. Poor order lead-time (1-2 weeks) indicates low quality earnings and poor visibility on a prospective recovery.

• Primasia View: We believe Compeq is unlikely to reach its target of NT$21.5bn in revenue, due to weak demand in telecom and discounted position in Flip-Chip II.