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Shares of Asustek jump on Q1 results

Shares of Asustek jump on Q1 results

Taipei, May 2 (CNA) Shares of Asustek Computer Inc., one of the world's leading personal computer vendors, were sharply higher Wednesday morning as the company reported better-than-expected results for the first quarter of this year, dealers said. Buying interest also gained momentum after several foreign brokerages raised their target prices on the stock because of increasing optimism over its earnings outlook, they said. As of 11:20 a.m., shares of Asustek had added 7 percent, the maximum daily increase, to NT$315.50 (US$10.84) with 8.98 million shares changing hands, while the benchmark weighted index was up 1.78 percent at 7,635.20 points. "Asustek's first quarter results did exceed the NT$5-NT$6 in earnings per share the market expected, attracting lots of attention this morning," Mirae Asset Management analyst Arch Shih said. The PC vendor had net profit of NT$5.01 billion in the first quarter, up 3 percent from a quarter earlier and also up 46 percent from a year earlier, with EPS at NT$6.65. "On the back of new models, in particular its popular tablet computer 'Transformer' series, the company saw an improvement in its gross margin during the first quarter," Shih said. According to Asustek, its gross margin for the January-March period rose to 13.9 percent from 13.6 percent recorded a quarter earlier, while its operating margin improved to 5.2 percent from 4.7 percent. "Among the non-iPad tablet suppliers, Asustek is one of the firms most committed to developing tablet gadgets to take on strong competition from Apple," Shih said. "Its efforts seemed to have paid off based on its first quarter earnings," Shih said. "Investors even look forward to a better bottom line on expectations that the PC sector will improve quarter by quarter after the slow-season effects seen in the first quarter." Shih said that after a recent consolidation, Asustek shares have regained momentum, especially after the company announced its first quarter results, as foreign institutional investors resumed buying in the stock. Foreign institutional investors were net buyers of 1.52 million Asustek shares Monday. The local bourse was closed for the Labor Day holiday Tuesday. "Investor sentiment has improved further after several foreign brokerages raised their target prices on Asustek shares," Shih said. Among the foreign brokerages that have been upbeat about Asustek's earnings outlook, Barclays Capital raised its target price for the stock to NT$338 from NT$310 and its forecast for the PC vendor's EPS for 2012 and 2013 to NT$25.1 and NT$28.2, respectively, from NT$24.36 and NT$27.27. (By Lo Hsiu-wen and Frances Huang)


Updated : 2021-02-26 04:07 GMT+08:00