09.20.2001
Accton, Ambit may thrive on US downturn

• Development: Possible further economic deterioration following the terrorist acts against the US may benefit Taiwanese communication and networking equipment makers in the long term. Valuations are already at historic lows and could fall further in the short term.

• Analysis: Although end-market demand remains uncertain, we believe Taiwanese outsourcing companies are poised for more business as US communication plays continue cutting costs in the face of economic downturn.

• Primasia View: Accton and Ambit remain our top picks. Accton is the ultimate outsourcing partner for networking products. Ambit is well positioned in Asian broadband markets, which are expected to post rapid growth in the next two years.