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Technology Stocks : Alliance Semiconductor -- Ignore unavailable to you. Want to Upgrade?

To: DJBEINO who wrote (1982)	11/13/1997 10:50:00 PM
From: DJBEINO	Read Replies (1) \| Respond to of 9582

Headline: Alliance Semi: ALSC EPS Estimates Fine Tuned Down; Meeting 11/ (from LEHMAN) EXPECT CAUTIOUS OUTLOOK AT 11/14 MEETING. We hosted a meeting with ALSC top management 10 days ago (see 10/31/97 note titled Deceleration Still The Trend For Chip Fundamentals). At that time we indicated an ongoing rugged DRAM pricing environment made our EPS estimates seem somewhat optimistic. We are incorporating that caution into our estimates now. Consequently we now project March FY98 EPS at -$0.15 (old: $0.00), FY99 at $0.40 (old: $0.50), and have fine tuned our FY00 estimate up to $1.05 (old: $1.00). 1 MAINTAINED BUT WE EXPRESS NEAR TERM CAUTION. However, we believe ALSC has substantial underlying value in its fab JVs. Additionally, we believe that the company is making progress in an effort to diversify its product line. In particular, ALSC appears to be making a move into the digital video market: we expect ALSC to introduce not only embedded memory graphics accelerators, but also a variety of other video oriented products. That said, the bulk of ALSC's current business is derived from DRAMs and SRAMs. The deceleration of the chip business has particularly hurt DRAM pricing and we see little likelihood of substantial near term earnings improvements during 3QFY98 and 4QFY98. We think the events that will move the stock will be an announcement of an IPO by one of its JVs, an upturn in commodity pricing or significant revenues from new product lines. None of these events are likely during the next few months. ---