some recent coverage from Barons:
Singapore Elec & Eltek Still Seen Long-Term Buy - Analysts
By BERNICE HAN
Dow Jones Newswires
SINGAPORE -- Singapore printed circuit board maker Elec & Eltek International Ltd. (P.EEI) is still a long-term buy despite the sharp fall in its stock Wednesday, analysts said.
The company on Monday reported a 12% fall in net profit to S$27.4 million (US$1=S$1.730) for the six months ended Dec. 31.
The sell-down on the stock Wednesday came in the wake of a meeting late Tuesday with analysts, where the company said net profit forecast for the full year has been revised lower to growth of 10%-15%, from the original indication of a 15-20% rise reiterated as late as February, according to two analysts.
The company's revision of its full-year net profit sent the stock reeling to an intraday low of US$4.18 Wednesday, down US$0.36 or 7.9% from Tuesday's close of US$4.54. It closed Wednesday's session at US$4.42 on volume of nearly 4.15 million shares.
The management, which has been on track in forecasting profit growth, has in one stroke dented its credibility, analysts said.
Company officials didn't return repeated telephone calls.
Management Credibility Questioned By Some
"The (fall) in share price is not only a reaction to the news but also a reflection on management credibility as well," said an analyst with a local bank-backed research house, who declined to be named.
The meeting Tuesday was "fairly hostile," said analysts who were present.
However, analysts said Elec & Eltek's long-term prospects remain intact.
"(Investors) should focus on the long-term positives of the company," said an analyst at a foreign research house.
The company is expected to launch its new Rambus boards in the fourth quarter of 1999, with volume production starting in 2000.
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Asian Stock Focus: Taiwan's Compeq Mfg At Bargain Price
By BAKER LI
Dow Jones Newswires
TAIPEI -- Given the anticipated rise in demand for its products after Intel Corp. (INTC) debuts its newest computer memory chipsets later this year, Taiwan's Compeq Manufacturing Co. (Q.CM) is a bargain, say analysts.
Compeq is expected to receive large orders from both domestic and overseas computer manufacturers seeking to replace their older printed circuit boards with the newer model to support the new chipsets, analysts said.
A chipset is a thin slice of semiconductor material, usually used as a connector between the Central Processing Uint and other computer units.
"The launch of the new chipsets will give the company a shot in the arm, as the new high-margin PCBs will help boost the company's sales and earnings," said Karl Chi, a PCB industry analyst at Asia Pacific Securities Investment Trust Co.
"It's the right time to pick up the stock now. We estimate that its stock price may rise up to NT$180 by the end of the year," said Chi. The company's shares closed NT$2.0 lower at NT$154.0 Thursday.
The share price of Taiwan's largest maker of printed circuit boards has fallen around 24% since the beginning of the year as price competition intensified after recent industry wide expansion projects, according to analysts.
There is consensus that the recent selling of the stock has been overdone as the price-earnings multiple has slipped to 19 times projected 1999 earnings per share of NT$8, well below the industry's average of 25 times.
Analysts Optimistic About Profit Growth
Earlier this week, the company reported a drop in accumulated sales for the first two months of the year. Sales amounted to NT$2.02 billion, as against NT$2.04 billion last year.
However, industry analysts are still optimistic about the company's sales and earnings performance for the rest of the year.
Based on its fundamentals, "sales at Compeq Manufacturing will rise 20% to 30% in 1999 from a year ago and profits will also grow 10% to 20%," said a PCB industry analyst at Fubon Securities Corp., who declined to be named.
According to Asia Pacific Securities' forecasts, Compeq Manufacturing is projected to post NT$3.2 billion in net profit for 1998, compared with NT$2.34 billion recorded in 1997. Sales last year are estimated at NT$14.68 billion, up from NT$8.98 billion in 1997.
The company's audited financial results for 1998 won't be disclosed until the end of April.
The positive earnings outlook is based on the new products due later in the year and the fact that Compeq is one of only two companies in Taiwan with the advanced technology to produce the printed circuit boards needed to support Intel's new-generation chipsets, said analysts. The other is OTC-listed Boardtek Electronics Corp.
Intel's new chipsets will account for about 10% of the total global production by the end of the year and nearly 35% by the year 2000, boosting demand for other related computer peripherals, including PCBs, said C.H. Wu, who tracks the electronics industry for MasterLink Securities Corp.
The new generation chipsets will support Direct Rambus dynamic random access memory chips, designed by Rambus Inc. (RMBS), due in the third quarter of the year. The chips have a data-transmission capacity twice that of current mainstay chips, analysts said and will enable PC users to take full advantage of new high-speed microprocessor units, such as the ones Intel makes.
Advanced Technology, Increased Production
Compeq Manufacturing has also been involved in the development of advanced ball-grid array (BGA) technology over the past few years, which increases the efficiency of high-speed chipsets like the Direct RDRAM chipset, said Wu.
BGA technology saves electricity, offers better dissipation of heat and reduces size while adding more functions and reliability, said Wu.
Compeq Manufacturing has invested around NT$2.5 billion in producing BGA PCBs at its Taoyuan facility in northern Taiwan. The facility will have a monthly output of 170,000 square meters of BGA PCBs after it starts operating in the second quarter of 1999, and will boost domestic production to 1.2 million square feet per month from the 1 million square feet at the end of last year, said Wu.
In addition, Compeq's facilities abroad are also expected to produce more.
The monthly production of Compeq International Corp. in the U.S. will rise to 250,000 square feet in 1999 from 220,000 square feet last year while Compeq Manufacturing (Huizhou) Co. in Guangdong province, southern China, is projected to churn out 500,000 square feet per month, up from 300,000 square feet in 1998, said Wu.
The analyst at Fubon Securities also pointed out that Taiwan's PCB industry is expected to follow the electronics industry's trend of integration in the future.
"Small and medium-sized PCB makers will not survive the keen competition as the big become bigger," said the analyst, predicting that the number of the local PCB makers will shrink to less than 10 within the next five years from the 20 at present.
By virtue of the company's dominant market position, Compeq Manufacturing will continue to be the leader in the local PCB market in coming years, said the analyst.
Last year, the company's production value accounted for about 16% of the NT$91 billion local PCB industry, according to Materials Research Laboratories of the Industrial Technology Research Institute.
The PCB industry is the second largest electronics component industry in Taiwan after the semiconductor industry.
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