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Technology Stocks : C-Cube Microsystems

CUBE 35.70

+0.8%

2:39 PM EST

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To: John Rieman who wrote (245)	4/9/1998 2:06:00 PM
From: Maya	of 324

John, Following share of Cube's revenues is excerpted from Lehman's report. Divi's share works out close to your numbers at $104 million. Let's concentrate on this and see how it adds up this time. C-Cube's 1997 sales of $337 million were 48% from MPEG-1 decoders serving the video CD (VCD) business in China (73% market share), 31% from video broadcast equipment system sales through the Divicom subsidiary (25% market share), 10% from MPEG-2 decoders principally for satellite/cable digital settop boxes (14% market share), and 6% from MPEG-2 encoders principally for the broadcast industry (57% market share). Divicom is already number two worldwide in supplying critical compression gear to digital broadcasters. Divicom looks likely to show steady strong growth averaging over 30% annually. Their Divi's growth estimates are a bit lower at 30%. This implies that Cube should demand a higher PE than it is trading currently at.

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