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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Ibexx who wrote (84318)	10/20/2000 11:06:46 PM
From: JohnG	Respond to of 152472

Ibexx. Thanks so much for sharing this info with us. If it is true, we should be at $100 to $110/share according to my calculations rather than at $77. JohnG

To: Ibexx who wrote (84318)	10/20/2000 11:34:13 PM
From: Ibexx	Read Replies (1) \| Respond to of 152472

PART IV: Prudential Volpe on QUALCOMM Impact of China on our numbers As we stated earlier this year, we believe that a CDMA network will be a reality in China, but the timing is still unclear and the impact of this new CDMA network on QUALCOMM of this new CDMA network on QUALCOMM's earnings is uncertain. We are assuming a conservative ramp of 1 million subscribers in fsical year 2001, 5 million subscribers in fiscal year 2002, 15 million subscribers in fiscal year 2003, 25 million in fiscal year 2004 and 35 million subscribers in fiscal year 2005. These cumulative subscriber additions would increase the EPS growth rate to 42.5% from 42%. This subscriber ramp could prove to be conservative based on the low penetratioon and huge market that China represents. At this time, however, we believe it is prudent not to include these subscriber estimates but point to their potential as an opportunity going forward. Based on our assumptions, it appears QUALCOMM trades at a discount Based on First Call numbers and our estimates, QUALCOMM trades at a discount to both the large-cap wireless names as well as many of the wireless semiconductor com panies. Qualcomm's calender year 2001 P/E of 58 times is above the average calender year 2001 P/E of 41 times for the large- cap names and 38 times of the ratio semiconductor companies. But when we based the com parison on a P/E to growth ratio, QUALCOMM's 1.48 is below the average of 1.63. In addition, we believe that if China adopts CDMA, there is opportunity for the growth rate of 40% to increase. The sum of parts valuation also indicates upside for the stock The company announced in July that it planned an IPO of its ASIC business, temporarily named Spinco, for the fall. We broke out the two business into separate models in order to determine its post split value. The two companies income instatement summaries are as follows: Cal yr C00 C01 C02 C03 C04 Current Qualcomm Rev (M) $2684 3832 5439 7865 10018 EPS $1.02 1.34 1.88 2.71 3.50 New Qualcomm Rev (M) $1451 1724 2350 3092 3918 (without Spinco) EPS $0.50 0.80 1.06 1.38 1.74 Spinco Rev (M) $1233 2110 3089 4773 6099 EPS $0.50 0.52 0.78 1.23 1.56 (To be continued) Ibexx