Hewlett-Packard Co’s (HP) plan to separate its PC and printer businesses from its corporate hardware and services operations could benefit some Taiwanese firms in its supply chain, JPMorgan Securities Ltd said.
On Monday, HP said it would split into two companies, with the PC and printing business grouped as HP Inc, while the server, storage, networking, software and enterprise services consolidated under HP Enterprise.
Analysts say the move will allows HP's PC and printer business to become more nimble while keeping cash for its own expansion or potential acquisitions.
“We believe HP Inc will become more aggressive in the PC market following the split, as seen in Dell’s privatization in late 2013,” JPMorgan analysts led by Gokul Hariharan wrote in a note.
The brokerage said any potential pickup in volumes of HP notebook computers would be positive for Quanta Computer Inc (廣達) and Inventec Corp (英業達), while Pegatron Corp (和碩) might be further crowded out in this line of business.
Hon Hai Precision Industry Co (鴻海) might also benefit from increased sales in HP’s desktop computers and its potential push into the mobile space, the brokerage said.
However, the move might be negative for PC brands like Asustek Computer Inc (華碩) and Acer Inc (宏碁), given their high degree of consumer market focus, JPMorgan said.
CONSUMER MARKET
“We expect HP to push more into the consumer PC market, where it has not been too aggressive in recent years, which would post an imminent threat to Asustek and Acer,” JPMorgan said.
With the potential impact on China’s Lenovo Group Ltd (聯想) likely to be limited, the brokerage said both HP and Lenovo could grow to account for 50 percent of the PC market share in the next three to four years, along with enhanced profitability.
FLEXIBILITY
While the split plan would enable HP more structural flexibility and to be more ambitious in the market, the move indicates that the PC sector is facing challenges and that technology giants are struggling to find a way out, Yuanta Securities Investment Consulting Co (元大投顧) analyst Vincent Chen (陳豐丰) said in a separate note.
Chen said he expects Lenovo, Dell and Asustek would enjoy some short-term benefits while HP goes through the restructuring process, with neutral implications on HP’s suppliers, if not negative.
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