09.20.2001
CHT, TCC moderately affected by Nari

• Development: Typhoon Nari damaged 200 of Chunghwa Telecom’s (CHT) base stations and 103 of Taiwan Cellular’s (TCC), 5% and 3% of base station facilities, respectively. Additionally, 2.9m of CHT’s fixed lines are still out of action, but all are expected to be restored within 2 weeks.

• Analysis: Damage is estimated at NT$890m for CHT and NT$120m for TCC. The bulk of costs will be shouldered by insurance cover. We believe revenues will be impacted more than earnings. However, 80% of revenues lost due to downed systems is expected to be recovered as mobile use was up significantly during the typhoon. We are therefore not downgrading our FY01 earnings forecast for TCC. .

• Primasia View: We remain positive on TCC’s 2H01 outlook and maintain Strong Buy.