Merrill Lynch Taiwan yesterday raised the estimated earnings for Asustek Computer Co (華碩電腦), in light of the company's restructuring in the past year and a half, the US investment bank said.
"Successful brand repositioning, cost-competitive lines, component affiliates in China and faster product diversification should help Asustek stand out against other motherboard makers and notebook ODMs [original design manufacturers]," Merrill Lynch said in a report released yesterday.
The report upgraded the estimated earnings per share (EPS) for Asustek to NT$7 for this year, with the share price valued at NT$100 based on a price-earnings ratio of 14, Merrill Lynch said.
Asustek shares stayed unchanged at NT$80.5 on the TAIEX yesterday.
Merrill Lynch also adjusted the net profit forecast for the company to around NT$16 billion this year, 38 percent up from last year, on expected consolidated revenue of NT$253 billion this year, 29 percent up from a year ago.
Asustek's branded products, which usually enjoy a high margin of up to 25 percent, could make up 60 percent of its annual revenue this year from 40 percent last year, the report said.
Laptops, the major driver of growth, are expected to surpass motherboards to be the largest division of Asustek's product mix this year, taking 32 percent of annual sales from 29 percent last year.
Laptop shipments are estimated to grow from 1.7 million units to 3 million units this year, including 1.3 million branded laptops, driven by strong growth for products bearing own names and full-year shipment of around 1.7 million to Apple Inc.
Growth momentum would continue next year to hit 3.9 million units, led by the company's own-brand notebooks, the report predicted.
Motherboard shipments would grow to over 40 million units this year from 29.5 million units last year, bolstered by strong momentum from branded products, and would grab 30 percent of global market share this year.
Sales of other products, like optical disk drives and broadband devices, are expected to nearly double, accounting for between 16 percent and 21 percent of sales this year, according to Merrill Lynch.
Despite the rosy forecast, the company was warned of carefully handling conflict of interest between its own brand and contracted clients in the notebook business and competition from the world's No.2 motherboard maker, Hon Hai Precision Industry Co (
Asustek is scheduled to roll out its own-brand handsets next month, branded liquid-crystal-display (LCD) monitors in the third quarter and LCD TV next year, the company's global brand marketing manager Sunny Han (
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