10.17.2001
Management team under reform

• AU Optronics will hold its first post-merger shareholder meeting to elect a board of directors and create a new management team. The current president (from UMC (2303.TT)) has requested to resign and the current vice president (from Acer (2306.TT)) will take over. Previously, the former CFO (from UMC) was replaced by an Acer executive. There has been some concern in the market as to whether there can be cooperation between the Acer and UMC representatives. Moreover, possible earnings downgrades in the near future may cast a pall over the share price. A separate meeting is expected to focus on the new group’s long-term strategy in an effort to dispel market doubts. We recommend a Trading Buy on AU Optronics over a 3-month time horizon.