Fri, Oct 27, 2006 - Page 11 News List

Asustek posts record net profit

BLOOMBERG

Asustek Computer Inc (華碩電腦), the world's biggest motherboard maker, reported a record profit in the third quarter, driven by increased sales of notebook computers and products sold under its own brand name.

Net income rose 23 percent to NT$6.13 billion (US$184 million) from NT$4.97 billion a year earlier, the company said.

Asustek is expanding its business to sell more products such as notebooks under its own name, as well as leveraging famous brand names such as automaker Lamborghini. The company is also increasing contract manufacturing for clients such as Dell Inc and Apple Computer Inc.

"The company has a strong brand image from their motherboard business, which they leveraged to sell their notebook computers," said Calvin Huang, who rates Asustek a "buy" in his coverage for BNP Paribas in Taipei.

Asustek's unconsolidated third-quarter sales, reported earlier, rose 62 percent to NT$91.3 billion, compared with NT$56.3 billion a year earlier.

The company signed a deal with Italian sports car maker Lambhorgini SpA in January to design and sell products bearing both the Asustek and Lambhorgini names. In March, Asustek released a notebook computer with a light aluminum casing and leather inlay aimed at high-end customers.

"Our brand strategy was very helpful for our earnings," Asustek spokesman David Chang (張偉明) said in a telephone interview. "We focused on our niche in notebooks -- design and styling -- which is high-end."

Asustek expanded its industrial design team from 60 designers in 2002 to 500 this year, with its product design team growing 10-fold over that period to 57 designers.

The company benefited from the recovery in the European computer market in the third quarter where consumers already know the Asustek name from its motherboard business, Huang said.

Asustek has a global market share of about 35 percent in motherboards, according to the company. It is Taiwan's fourth-largest notebook maker by third-quarter shipments, according to data compiled by UBS AG.

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