Sat, Mar 10, 2007 - Page 11 News List

Macquarie confirms Wistron's rating

By Jason Tan  /  STAFF REPORTER

Macquarie Research Equities yesterday confirmed its "Outperform" rating for Wistron Corp (緯創), one of the nation's top-tier computer makers, but slightly downgraded its target price.

The target price was adjusted to NT$61 from NT$63 because of lower demand for XBox 360 game consoles, which Wistron assembles for Microsoft Corp, Macquarie analyst Daniel Chang (張博淇) said in a report released yesterday.

Shares of Wistron, a spin-off from Acer Inc, closed up 4.2 percent to NT$47 on the Taiwan Stock Exchange yesterday.

The Australian equities firm said investors should continue to accumulate Wistron shares during the current quarter, as robust growth was expected from the second quarter.

"We believe Wistron looks very attractive now ? Our positive view remains unchanged, perhaps stronger than our previous expectations because of the strong outlook for notebook demand," Chang said.

Wistron reported a 4.5 percent decline in sales during the first two months to NT$30.6 billion (US$928 million). But the computer maker's notebook business will grow strongly from the next quarter as Acer and Dell Inc's new models are ramping up, Chang wrote.

Wistron's revenues are also expected to grow by at least 20 percent per quarter throughout this year, driven by all product lines, including liquid-crystal-display (LCD) TVs and handheld devices.

The company has reportedly gained extra orders from Hewlett-Packard Co and Sharp Corp for LCD TVs this year. The new clients will reportedly boost Wistron's LCD TV shipments to 1 million units, from 100,000 units last year.

Macquarie seconded this, predicting that Wistron's LCD TV business should grow 900 percent while its handheld business would grow 150 percent from last year.

Even so, the equities firm forecast Wistron would report low profitability for the final quarter of last year and this current quarter, owing to the company's notebook customers' shifting orders to competitors.

Macquarie expects Wistron's net profit in the fourth quarter to be NT$1.26 billion, or NT$1 per share, which is flat quarter-on-quarter. Its net profit in the current quarter would see an 18 percent decline from the earlier three months to NT$1.03 billion, or NT$0.81 per share.

Macquarie expects Wistron to generate NT$5.3 earnings per share for the full year.

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