Yuanta confirms its buy rating for Acer

Taipei-based Yuanta Core Pacific Securities (元大京華證券) yesterday confirmed its buy rating for Acer Inc, the world's fifth-largest PC vendor, citing solid growth momentum despite potential negative impact from the depreciating euro.

While the company expects its revenue in the second quarter to be roughly flat sequentially, "Acer's branded information-technology products, which make up about 87 percent of revenue, could post 5 to 6 percent growth quarter-on-quarter [in the meantime]," Yuanta Core Pacific deputy research head Steven Tseng (曾續良) said in a report.

Tseng attributed the growth of Acer's core business to strong performances in several countries such as Russia, India and Australia.

Looking ahead, Acer expects that seasonal strength from Asia and the US, as well as the contribution of new products such as liquid-crystal-display TVs, will support the momentum both next month and in August, before a likely sales surge in September as the peak season in Europe begins, Tseng said.

Yuanta Core Pacific accordingly trimmed its forecast for Acer revenue to NT$297.4 billion (US$9.5 billion) this year, down from NT$304.3 billion previously, with the predicted earnings per share dropping to NT$4.00 from NT$4.07.

However, the securities house retained the buy rating for Acer, eyeing growth potential next year.