Tue, Aug 22, 2006 - Page 12 News List

Asustek forecasts 45.5% jump in sales this year

OPTIMISM The company said that increased notebook sales would help it achieve the target, but a Citigroup report expressed concern it would face margin pressure

By Jason Tan  /  STAFF REPORTER

Asustek Computer Inc (華碩電腦), the world's largest motherboard maker, said yesterday that sales will rise 45.5 percent this year on strong shipments of notebook computers.

"We are confident of meeting our consolidated sales target this year of US$16 billion," Sunny Han (韓德行), Asustek's global brand marketing director, told reporters yesterday.

The figure represents a 45.5 percent increase over the US$11 billion in sales the company reported last year, thanks to stronger shipments from laptop computers.

The target was achievable, he said, "If there are no issues regarding component shortages or excess inventories."

Price cuts from chipmakers and back-to-school sales would also help boost revenues, he said.

The company achieved 40 percent of the sales target in the first half of the year, a slow period for most electronics makers due to excess inventories from last year, Han said.

This year, portable computers will continue to be the major source of revenue, exceeding last year's contribution of 31 percent, while the amount contributed by motherboards will fall from last year's 23 percent to below 20 percent, he said.

Asustek said it will ship 6 million laptop computers this year, up from 3.8 million last year, while motherboard shipments are expected to 60 million units, up from 52 million last year.

The company stands a good chance of beating US firm Dell Inc to become the fourth-largest notebook brand in the Asia-Pacific region in the second half, fueled by demand in China, Thailand, Australia and New Zealand, Benson Lin (林宗樑), Asustek's general manager of sales and marketing, said last month.

The region's top-three makers are China's Lenovo Group Ltd (聯想), Hewlett-Packard Co of the US and Taiwan's Acer Inc.

In a report released yesterday, Citi Investment Research maintained a "sell" rating on Asustek's shares with a target price at NT$60 (US$1.84). The firm expressed caution toward the Taiwanese motherboard sector, based on soft shipments last month and possible below-normal seasonal demand in the third quarter.

"As Dell's profitability declines, it will likely squeeze its Taiwanese suppliers more, including Asustek," it said.

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