Asustek shares rise on latest report

Asustek Computer Inc (華碩電腦) saw its shares rise yesterday as both investors and analysts welcomed the company's latest report of first half year earnings.

Shares of the nation's largest maker of motherboards gained NT$3.20, or 3.6 percent, to close at NT$92.20 on the Taiwan Stock Exchange, outperforming a 0.11-percent increase in the benchmark TAIEX.

In a filing with the local exchange late on Monday, Asustek said profit in the first six months rose 91 percent from a year earlier to NT$13.58 billion (US$411 million).

Second-quarter profit rose to NT$6.85 billion as the company sold more notebook computers under its own Asus brand.

The company also makes computers for Apple Inc and Sony Corp as well as Sony's PlayStation 3 games console.

The research team at Citigroup Global Markets said in a note dated on Monday that it would maintain a "buy" rating on the Asustek stock as the company is still one of its top picks in the Asia personal computer and motherboard sector.

Citigroup gave a target price of NT$125 for Asustek, given the company's strong improvement margin and record profits from brand business.

Asustek will provide full second-quarter financial details including non-operating profit and outlook at a briefing on Sept. 4 in Taipei.

"While we wait for the analyst meeting on Sept. 4 for more details, we believe Asustek's stock price would react positively to the strong 2007 results," Citigroup analyst Kirk Yang (楊應超) wrote in the note.

UBS AG also maintained a "buy" rating on the stock and raised its 12-month price target to NT$118 from NT$105.

"Asustek could maintain above industry growth given its differentiated product offering, favorable emerging markets exposure and limited US presence," UBS analyst Arthur Hsieh (謝宗文) wrote in a report dated on Monday.

"Companies with solid scorecards are favored by investors," Hsieh said. "Ultimately they will make decisions based on corporate profitability."

Taipei-based Asustek won an order from Dell Inc, the world's second-largest computer supplier, to make laptops for delivery beginning in the second half of next year, Hsieh wrote.

Citigroup expects Asustek to ship 61 million motherboards, 7 million to 7.5 million notebook computers and 200,000 to 500,000 units of the super low-cost computer, Eee PC, this year.