10.09.2001
Beating expectations

• Cheng Uei, X-Box peripheral maker, reported Sept. revenue of NT$818m, up 31% MoM and 78% YoY, leaving 3Q revenue at NT$1.95bn, ahead of our conservative forecast of NT$1.7bn. Cheng Uei stated that the US tragedy and typhoon in Sept. had immaterial impacts on revenue. Going forward, we expect the company’s 4Q revenue to remain robust based on continued shipment for X-Box peripherals and increasing shipment for Motorola branded batteries. We expect continued performance from firm despite Sony’s (X-Box’s major competitor) plans to cut prices for its PS2 game consoles before the X-Box launch. The stock currently trades at a PE of 17x ‘01 EPS, which is off from the historical PE range of above 20x. We maintain our Accumulate recommendation with a target price of NT$60 on this counter.