10.05.2001
Zxyel revenues have likely seen bottom

• Zyxel shares tanked yesterday on rumors the company may revise down 01 forecast. Company admitted that 3Q01 revenues may disappoint the market, but stated that 3Q01 gross margin would exceed that of 1H01, leaving earnings more or less in line with expectations. We expect 4Q01 results to outperform 3Q01 based on increasing post-summer holiday season demand in Europe and growing demand for MTUs in China. We think forecast revision is unlikely. We anticipate Zyxel will achieve over 90% of earnings forecast in 2001.. L-T Buy