10.30.2001
Going into hibernation

• Sunplus has finally decided to lower revenue forecast by 18% to NT$6.6bn, with pretax earnings down 30% to NT$2bn, for EPS of NT$3.82 for 2001. Firm stated losses from TN/STN LCD subsidiary, Giantplus, will continue in 4Q01. Sunplus also suggests that divestment of Globalview (5477.TT) investment is an unfavorable option at the currently depressed price level. We believe possible price weakness in the near term will expose an attractive entry point, as most bad news will be discounted accordingly. We are sticking to our L-T Buy recommendation, as the upcoming two quarters will be rather quiet in our view. We believe Sunplus' extensive IP database, time to market ability and strong client relationships will pay-off once the industry recovers.