10.19.2001
Accton facing conversion pressure on ECB

• Market rumor suggests Accton could face conversion pressure on its European Convertible Bond, issued two months ago as premium has widened to nearly 10% (conversion price NT$40.60). Sources indicate most of Accton’s ECB buyers hold long-term views, which would limit conversion pressure. Buying opportunity may be presented if share price declines given promising growth potential in wireless LAN and value-added broadband equipment as well as addition of new outsourcing clients, namely Dell. We maintain our Buy recommendation with a target price of NT$57 for a 6-12 month investment horizon.