BenQ forecast to report 25 percent sales growth

BenQ Corp (明基電通), a leading consumer electronics maker, is expected to report up to 25 percent revenue growth next year boosted by booming demand for flat-screen televisions and optical storage drives, analysts predicted yesterday.

"We expect the resilient demand for consumer electronics, including liquid crystal display [LCD] TVs and projectors will carry on to next year. And BenQ has been working aggressively in this area," said Benny Lo (盧志恆), an analyst with Primasia Securities Co in Taipei.

The growth rate will be in the 10 to 20 percent range next year, which will push up the company's consolidated revenue to about NT$14.4 billion from NT$12 billion this year, depending on the performance of BenQ's handset business, Lo predicted.

BenQ, also the country's largest handset maker, has been under a shadow amid widespread speculation that Motorola Inc, its major original design manufacturing (ODM) customer, may shift orders to rivals Compal Communications Inc (華寶通訊) and Chi Mei Communication Systems Inc (奇美通訊).

But an analyst with Yunta Core Pacific Securities (元大京華) downplayed the Motorola factor.

"I still hold a rosier outlook for the company. My optimism is based on the theory that the order loss from Motorola will be more or less offset by new orders from Siemens AG of Germany, though the volume is still uncertain," Steven Tseng (曾續良) said.

Tseng predicted BenQ would reap a 25 percent increase in consolidated revenue next year from this year.

"A setback in the handset business is foreseeable, but the impact on BenQ's profitability will be slight, as the company is expected to get a better gross margin by selling high-end brand-name phones," Tseng said.

BenQ's sales contribution from cellphone business is expected to drop to 10 percent next year from 20 percent this year, Tseng added.

BenQ chairman Lee Kun-yao (李焜耀) declined to predict the growth rate for next year, but he said the brandname business will outpace that of the ODM business.

BenQ yesterday reported its November consolidated revenue rose by 16 percent to US$329 million (NT$11.19 billion) from a year earlier.

The figure is down 9 percent from October, due to the shortage of key components and a lack of inventory, the company's vice spokesman Alex Liou (劉維宇) said.

BenQ reportedly has the upper hand in its effort to win the right to export brand-name mobile phones to China next year, but BenQ's sales-operations vice president Jerry Wang (王文燦) said only the authorities in Beijing would have the final say about the matter.

"We will do our best to vie for business opportunities in China," Wang said yesterday on the sidelines of IT Month, currently being held at the Taipei World Trade Center Exhibition Hall.

DBTEL Inc (大霸電子) is currently the only Taiwanese handset maker allowed to sell its brandname phones in China.