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Foreign brokerages raise target prices on Asustek shares

2012/05/01 19:59:58

Taipei, May 1 (CNA) Several foreign brokerages raised their target prices Tuesday on shares of Asustek Computer Inc., one of the world's leading personal computer vendors, after the company reported better-than-expected earnings for the first quarter of this year.

Asustek a day earlier posted NT$5.01 billion (US$171 million) in net profit for the January-March period, up 3 percent from a quarter earlier and also up 46 percent from a year earlier, with earnings per share (EPS) at NT$6.65.

The first quarter net profit was the highest level for the past nine quarters, the company said.

Asustek's first quarter operating margin stood at 5.2 percent, up from 4.7 percent recorded in the same period of last year.

Merrill Lynch said that with the launch of new products from the second quarter, Asustek's operating margin is expected to rise to 5.3 percent in the second quarter, adding that it had upgraded its forecast for Asustek's 2012 earnings per share by 7 percent to NT$27.

The brokerage said it has raised its target price on Asustek shares to NT$351 from NT$328, while reiterating a "buy" recommendation on the stock.

Asustek shares closed up 0.17 percent to end at NT$295.00 on the Taiwan Stock Exchange Monday, prior to its release of the first quarter results.

Macquarie Securities said the first quarter results have prompted the brokerage to increase its forecasts for the PC vendor's EPS for 2012 and 2013 by 8 percent and 7 percent, respectively to NT$28.11 and NT$32.03.

The brokerage said it has upgraded its target price on the stock to NT$336 from NT$286 and maintained an "outperform" rating.

Asustek Chief Executive Officer Jerry Shen said in an investor conference a day earlier that his company is planning to unveil several tablet computers to be priced at US$199-US$599, starting from the second quarter.

He said the company aims to become the largest vendor of tablets operating on the Android system by the end of the third quarter.

Macquarie Securities said Asustek is expected to ship 2 million to 3 million tablets this year.

For its part, BNP Paribas, which has upgraded its target price on the stock to NT$340 from NT$302, said Asustek is expected to benefit from rising buying interest on the back of the launch of Intel's Ivy Bridge processor and Microsoft's Windows 8 operating system.

BNP Paribas said it has upgraded its forecasts for Asustek's EPS for 2012 and 2013 by 11.3 percent and 4.2 percent, respectively to NT$27.99 and NT$31.62, and has maintained a "buy" recommendation on the stock.

Meanwhile, RBS Securities has raised its target price on Asustek shares to NT$340 from NT$312, while Goldman Sachs has upgraded its target price to NT$325 from NT$300.

(By Lo Hsiu-wen and Frances Huang)
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