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Deal with Founder to boost Acer's China market share

Deal with Founder to boost Acer's China market share

Taipei, May 28 (CNA) Goldman Sachs said Friday that a cooperation deal between Taiwan's Acer Inc. and China's Founder Group is expected to help the Taiwanese company realize its plan to grab a 10 percent share of China's notebook computer market by the end of this year.
Acer, the world's largest notebook computer vendor, signed a memorandum of understanding with Founder a day earlier with the aim of expanding their information technology and communications business in China.
Under the deal, Acer will take advantage of Founder's comprehensive distribution network to sell Acer products in tier 4-6 Chinese cities -- which have populations of less than 20,000 -- and rural areas, while targeting corporate and government clients.
Meanwhile, Founder will work with Acer to design and develop Founder-branded products, including notebooks, netbooks and mobile Internet devices such as e-readers.
Goldman Sachs Asia Managing Director Henry King said that with the support from Founder, Acer will be able to go beyond major Chinese cities and penetrate a large number of smaller cities, catering to more potential buyers.
King said Acer is expected to realize its goal of expanding its share in the Chinese notebook market to 10 percent by the end of this year, up from the 7 percent recorded in the first quarter of this year.
Acer now ranks as the fifth-largest notebook vendor in China, while Founder is the eighth-largest, with a 4 percent market share.
However, King said that as Acer and Founder remain competitors in China, it could be a big challenge for both sides to build synergy under the cooperation.
Therefore, he said, he maintains a "neutral" recommendation for Acer stock.
Credit Suisse said that as the deal with Founder will definitely extend Acer's reach in China, the brokerage has rated Acer as a market outperformer, with a target share price of NT$91.1.
Morgan Stanley maintained a "buy" recommendation for the company, with a target share price of NT$106 as a result of the deal.
Acer shares closed up 6.91 percent at NT$80.50 on the Taiwan Stock Exchange Friday.
(By Erin Ho and Frances Huang)




Updated : 2021-04-12 06:47 GMT+08:00