US brokerage firm Morgan Stanley yesterday slightly reduced its estimates for fourth-quarter global notebook computer shipments, reflecting a cautious view from top contract makers during a low season for consumer electronics.
Morgan Stanley predicted that notebook shipments from the top five original design manufacturers (ODMs) would decline by 7 percent sequentially to 35.5 million units in the October-December quarter, compared with its previous forecast of a 6 percent drop to 35.75 million units.
The top five ODMs are all Taiwanese companies: Quanta Computer Inc (廣達電腦), Compal Electronics Inc (仁寶電腦), Wistron Corp (緯創), Inventec Corp (英業達) and Pegatron Corp (和碩).
The revision follows the five companies’ aggregate shipment reports for last month, which came in 3 percent lower than Morgan Stanley’s projections. The shortfalls were mainly from Compal, Wistron and Inventec, as Pegatron and Quanta beat the US firm’s projections.
“The small decrease in fourth-quarter notebook shipments reaffirms our view that notebook ODMs turned more cautious on the fourth-quarter outlook in late August and have not changed their tone since then,” Jasmine Lu (呂智穎), head of Taiwan research at Morgan Stanley, said in a client note.
“We believe the market will focus more on ODMs’ non-notebook businesses,” Lu wrote.
She recommended ODM stocks with “positive structural stories,” such as Pegatron, whose margins and capacities are improving, and Quanta, which will likely benefit from its higher-margin datacenter hardware business and orders to produce Apple Inc’s Apple Watch.
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