Taipei-based Yuanta Securities (元大證券) advised investors in its latest report to buy low-priced electronics makers including the world’s first netbook supplier, Asustek Computer Inc (華碩), as those companies may gain market share after consumers become price sensitive in what looks to be the worst economic recession in half a century.
US holiday retail sales were disappointing because of economic woes, but “netbooks are clearly a winner in the PC segment,” Vincent Chen (陳豊丰), head of downstream tech analysis at Yuanta, said in the report dated Wednesday.
Asustek’s Eee PC netbook and Acer Inc’s (宏碁) AspireOne ranked high on the top-10 bestsellers list in the US PC segment, Chen said, citing a survey of the bestsellers at major US retailers Amazon, Walmart and Best Buy.
“We believe the low-price trend will continue to dominate the current downturn,” Chen said. “We favor market share leaders in the low-price product segment that can gain market share in an industry downturn.”
Acer, the third-largest PC maker in the world, Asustek and the nation’s biggest electronic component maker, Hon Hai Precision Industry Co (鴻海精密), topped Chen’s recommendations, the report said.
Depressed valuations and inventory replenishment from next month, which would reduce the downside risk of industry leaders in the first quarter, also made those stocks attractive, Yuanta said.
Acer and Asustek would still enjoy early mover advantages in the netbook segment, Chen said.
In a previous report, Chen said Acer could ship more than 5 million netbooks this year, exceeding Acer’s expectations.
Acer gained an extra 5.5 percent share of the notebook computer market in the third quarter, climbing to 19.6 percent from 14.1 percent, tracking only behind Hewlett Packard Co, Chen said, citing Gartner’s survey.
As Christmas holiday shoppers favored netbooks, Chen said that global netbook shipment this year could exceed his previous forecast of 12.1 million units.
Chen set a target price for Acer and Asustek at NT$62.8 and NT$47.3 over the next 12 months, an increase of 47 percent and 29 percent from their closing prices of NT$42.6 and NT$36.8 on Wednesday. The target price for Hon Hai was set at NT$84.2, a 31 percent increase.