11.09.2001
Company Visit - Keeping those tires rolling . . .

• Cheng Shin is Taiwan's largest tire maker and the 14th largest in the world, with extensive China production facilities. Firm targets mid-range automobiles. VP suggests strategic direction of co. going forward will focus on expanding production in China (currently at full capacity) by 20% next year. China's entry into WTO and abolition of various taxes will make it easier for Cheng Shin to expand sales in domestic market. We believe Chinese auto market has massive potential for growth given highway development and present waiting list for cars. Foreign competition has been increasing but Cheng Shin's early entry gives it a distinct competitive advantage. We expect 2001 EPS of NT$2.03 (up 15% YoY) and gross margin to remain steady at 24%.