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India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
● Credit Suisse 2011 ATC last week: We hosted Acer, Asustek,
Lenovo, Quanta and Synnex at Credit Suisse’s Annual Technology
Conference last week in Taiwan. These companies held over 225
investor meetings. Overall, Acer’s Aspire S3 Ultrabook, announced
at IFA last week and showcased at our conference, was the buzz.
● 2H11 PC demand sluggish, but has not worsened: 2H11 PC
demand is expected to remain sluggish; however, companies
indicated they have not experienced any significant changes to
demand/orders over the last few weeks. In fact, many of these
companies highlighted that China PC demand has improved. We
believe this tone was incrementally positive for many investors.
Further, many of the companies were perplexed by the
timing/strategy of HP’s release and expect HP to lose PC share.
● Reiterate OUTPERFORM on Asus, Lenovo and Quanta: We
prefer ASUS for its innovation and product cycle leverage to
tablets and Ultrabooks, Lenovo for its leverage to a corporate
refresh and China PC demand, and Quanta for its leverage to
Apple Mac (and Ultrabooks), tablets and the direct sale of servers.
Below are takeaways from our meetings with our covered companies:
Quanta (OUTPERFORM): Conservatively positive
Outlook: Quanta reiterated its 0-5% QoQ 3Q11 notebook unit growth
target and its 2011 target of 57 mn units. Quanta has recorded 2.2%
QoQ QTD growth (July: 4.5 mn; August: 5.0 mn). Importantly, Quanta
said it has NOT experienced customer order cancelations over the
past few weeks. It highlighted that the product mix and higher opex
should put pressure on 3Q11 margins which was consistent with
stand on its 2Q11 earnings call. Its cloud computing goals remains at
10% of 2011 sales (including servers, storage, switches and tablets).
Product trends: In addition to Apple's MacBook Air, Quanta said it will
be involved in several Ultrabook models. In tablets, Quanta remains
cautious and has not defined estimates this year beyond ‘a few
million.’ It is believed that Quanta will be involved in the 7-inch tablet
from Amazon which is not in our numbers. Overall, Quanta is more
optimistic on the non-iPad market once Windows 8 becomes available.
Lenovo (OUTPERFORM): Positive
Outlook: Lenovo said its China business is on track and improving
sequentially. Despite macro concerns, SMB has not worsened in
China with lower-tiered cities driving growth. Outside China, Lenovo
expects to gain commercial PC share and believes the corporate
refresh will continue for the next five to six quarters. This is consistent
with Credit Suisse’s view of the corporate refresh cycle.
Product trends: Lenovo has launched its Ultrabooks, u300s priced at
US$1,100-1,200, and is planning for more models. Overall, Lenovo is
cautious on its UItrabook opportunity as it is still a small player in the
consumer PC market. Lenovo will have four tablets by year-end,
including the LePad, IdeaPad K1/P1 and ThinkPad tablets.
Asustek (OUTPERFORM): Positive
Outlook: ASUS reiterated 20% QoQ 3Q11 revenue growth target,
which compares to our 25% QoQ estimate. July/August sales tracked
better than expected due to ASUS’s strength in China, with it
reiterating its target of 50% QoQ notebook unit growth in the country.
ASUS said the disruptions at HP and Acer have provided
opportunities for it to gain PC market share, particularly in Western
Europe. ASUS reiterated 3Q11 operating margin target of 5% vs.
5.9% last quarter.
Product trends: ASUS will have four Ultrabook versions of 11” and 13”
with varying specs and is planning a September 2011 launch in New
York. Pricing will range between US$800 and US$1,300, and it
expects 5-10% of notebook shipments in 4Q11 to be Ultrabooks. In
4Q11, ASUS plans to launch Transformer 2 with the next Android OS
version (Ice Cream) and a newer chip generation. By next year,
ASUS will support the high-end tablet segment priced at US$500 and
a cost-down version with lower performance priced at US$200-300.
Acer (UNDERPERFORM): Negative/cautious
Outlook: Acer reiterated 0-5% QoQ 3Q11 revenue growth, which
compares with our expectation of 7.5% growth. Acer said China PC
demand is improving sequentially and Europe PC demand remains
constrained and is still working down inventory, while 4Q11 visibility is
still limited. Acer reiterated the challenge of reaching breakeven in
3Q11 and is modestly more optimistic on reaching breakeven in
4Q11.
Product trends: Acer will be launching several Ultrabook models (i.e.,
Aspire S3) and its new Iconia A100 7” tablet in 3Q11/4Q11.
Ultrabooks will be in a 13.3” form factor and offer a choice of hybrid
HDD and SSD storage capacities, with price points ranging from
US$799-1,199, depending on hardware specification. Acer reiterated
its tablet target of 2.0-2.5 mn units in 2011 which includes both Iconia
A500 and A100 devices.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
● Credit Suisse 2011 ATC last week: We hosted Acer, Asustek,
Lenovo, Quanta and Synnex at Credit Suisse’s Annual Technology
Conference last week in Taiwan. These companies held over 225
investor meetings. Overall, Acer’s Aspire S3 Ultrabook, announced
at IFA last week and showcased at our conference, was the buzz.
● 2H11 PC demand sluggish, but has not worsened: 2H11 PC
demand is expected to remain sluggish; however, companies
indicated they have not experienced any significant changes to
demand/orders over the last few weeks. In fact, many of these
companies highlighted that China PC demand has improved. We
believe this tone was incrementally positive for many investors.
Further, many of the companies were perplexed by the
timing/strategy of HP’s release and expect HP to lose PC share.
● Reiterate OUTPERFORM on Asus, Lenovo and Quanta: We
prefer ASUS for its innovation and product cycle leverage to
tablets and Ultrabooks, Lenovo for its leverage to a corporate
refresh and China PC demand, and Quanta for its leverage to
Apple Mac (and Ultrabooks), tablets and the direct sale of servers.
Below are takeaways from our meetings with our covered companies:
Quanta (OUTPERFORM): Conservatively positive
Outlook: Quanta reiterated its 0-5% QoQ 3Q11 notebook unit growth
target and its 2011 target of 57 mn units. Quanta has recorded 2.2%
QoQ QTD growth (July: 4.5 mn; August: 5.0 mn). Importantly, Quanta
said it has NOT experienced customer order cancelations over the
past few weeks. It highlighted that the product mix and higher opex
should put pressure on 3Q11 margins which was consistent with
stand on its 2Q11 earnings call. Its cloud computing goals remains at
10% of 2011 sales (including servers, storage, switches and tablets).
Product trends: In addition to Apple's MacBook Air, Quanta said it will
be involved in several Ultrabook models. In tablets, Quanta remains
cautious and has not defined estimates this year beyond ‘a few
million.’ It is believed that Quanta will be involved in the 7-inch tablet
from Amazon which is not in our numbers. Overall, Quanta is more
optimistic on the non-iPad market once Windows 8 becomes available.
Lenovo (OUTPERFORM): Positive
Outlook: Lenovo said its China business is on track and improving
sequentially. Despite macro concerns, SMB has not worsened in
China with lower-tiered cities driving growth. Outside China, Lenovo
expects to gain commercial PC share and believes the corporate
refresh will continue for the next five to six quarters. This is consistent
with Credit Suisse’s view of the corporate refresh cycle.
Product trends: Lenovo has launched its Ultrabooks, u300s priced at
US$1,100-1,200, and is planning for more models. Overall, Lenovo is
cautious on its UItrabook opportunity as it is still a small player in the
consumer PC market. Lenovo will have four tablets by year-end,
including the LePad, IdeaPad K1/P1 and ThinkPad tablets.
Asustek (OUTPERFORM): Positive
Outlook: ASUS reiterated 20% QoQ 3Q11 revenue growth target,
which compares to our 25% QoQ estimate. July/August sales tracked
better than expected due to ASUS’s strength in China, with it
reiterating its target of 50% QoQ notebook unit growth in the country.
ASUS said the disruptions at HP and Acer have provided
opportunities for it to gain PC market share, particularly in Western
Europe. ASUS reiterated 3Q11 operating margin target of 5% vs.
5.9% last quarter.
Product trends: ASUS will have four Ultrabook versions of 11” and 13”
with varying specs and is planning a September 2011 launch in New
York. Pricing will range between US$800 and US$1,300, and it
expects 5-10% of notebook shipments in 4Q11 to be Ultrabooks. In
4Q11, ASUS plans to launch Transformer 2 with the next Android OS
version (Ice Cream) and a newer chip generation. By next year,
ASUS will support the high-end tablet segment priced at US$500 and
a cost-down version with lower performance priced at US$200-300.
Acer (UNDERPERFORM): Negative/cautious
Outlook: Acer reiterated 0-5% QoQ 3Q11 revenue growth, which
compares with our expectation of 7.5% growth. Acer said China PC
demand is improving sequentially and Europe PC demand remains
constrained and is still working down inventory, while 4Q11 visibility is
still limited. Acer reiterated the challenge of reaching breakeven in
3Q11 and is modestly more optimistic on reaching breakeven in
4Q11.
Product trends: Acer will be launching several Ultrabook models (i.e.,
Aspire S3) and its new Iconia A100 7” tablet in 3Q11/4Q11.
Ultrabooks will be in a 13.3” form factor and offer a choice of hybrid
HDD and SSD storage capacities, with price points ranging from
US$799-1,199, depending on hardware specification. Acer reiterated
its tablet target of 2.0-2.5 mn units in 2011 which includes both Iconia
A500 and A100 devices.
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