11.12.2001
ACM setting the pace

• ACM expects to ship handsets totaling around 3m units in 4Q01, up from 1.6m units in 3Q. Moreover, shipments for storage equipment and LCD monitors are also likely to expand. While gross profit margin is expected to rise in 4Q due to increasing shipments of high margin handsets, operating expenses should be capped at a similar level to 3Q as increasing outsourcing business will incur lower sales and marketing costs. As a result, we estimate 4Q earnings to swing back to NT$750m, from just NT$6.8m in 3Q. Firm’s outlook for next year points to an improvement in handset, storage equipment and LCD monitor shipments along with the assumption that subsidiary AU Optronics (2409 TT) will report positive earnings in 2002. We maintain our recommendation with a target price of NT$37.50 on a 6-month investment horizon.