AsusTek shares rally on earnings


TAIPEI–Shares of personal computer vendor AsusTek Computer Inc. made a strong showing in Friday morning trade after the company reported better-than-expected earnings for the first three quarters of this year, dealers said. At 11:10 a.m., AsusTek rose 2.46 percent to 249.50 with 3.11 million shares changing hands, while the benchmark weighted index fell 0.86 percent to 8,282.37. It closed at 248.5, up 2.05 percent.

AsusTek announced a day earlier that it posted NT$12.47 billion (US$406 million) in net profit for the first nine months of this year, with an earnings per share (EPS) of NT$19.88. “The EPS is higher than the market consensus of about NT$15.00,” MasterLink Securities analyst Tom Tang said. “Investors appear happy with the results. That’s why the stock bucked the fall seen on the broader market,” Tang said. Tang said AsusTek is moving in the right direction by promoting its own brands in the global market after spinning off its manufacturing arm, Pegatron Technology Corp., earlier this year. He said that as the PC production sector’s gross margin has been squeezed badly amid fierce competition, the spinoff has been a way for the company to boost its bottom line. According to AsusTek, its gross margin stood at 13.9 percent in the third quarter, up from 11.9 percent recorded in the second quarter. “I expect AsusTek’s EPS will hit NT$24.00 for 2010,” Tang said. The company said it ranked as the world’s sixth-largest notebook computer vendor in the third quarter and that it expects to rise one notch to fifth in the fourth quarter and even grab the fourth-largest vendor position in 2011. Tang said that while there is some room for AsusTek’s share price to go up, investors had better stay alert to the prospect of strong technical resistance as the stock moves closer to NT$280.00.