Stan Shih: 'Acer Inc.'s Stock Value Seriously Undervalued' Acer Group Stan Shih assures foreign investors on Acer Inc.'s capabilities in its PC business, ability to re-engineer itself to the advancing economy, and promising long term investments TAIPEI, Oct. 2 /PRNewswire-AsiaNet/ -- With the recent falls of Acer Inc.'s stock value, Stan Shih, Chairman and CEO of the Acer Group, urges foreign investors to fairly evaluate upon Acer Inc.'s stock value by taking into account both the long term investments for the core business including the PC business. At the 'CLSA in Made in Taiwan Forum 2000', held by Credit Lyonnais Securities Asia, targeted at 120 foreign investors, Shih shared his thoughts during his keynote speech, entitled 'The Acer Group and Acer Inc.' 'Acer Inc. is the holding company of the Acer Group,' began Shih, 'to evaluate fairly and to be able to correctly judge Acer Inc.'s market value, we must look at both its long term investments and PC business. The subsidiary companies in our long term investments have overall performed well, and are one by one being listed on the Taiwan Stock Exchange. Their futures look optimistic and are set to grow positively. Comparing with the Taiwan electronics industry during the last five years, the market values of those companies invested by Acer Inc. have achieved over 900% in growth rate, more than double the growth rate compared to the Taiwan Stock Exchange Electronics index. Acer Inc.'s market value in 1999 was worth 76% of all companies within the Acer Group listed on the stock exchange. By September this year this had become 33%, demonstrating that the total investments in the Acer Group had increased significantly.' 'Although Acer Inc.'s investments were positive, they were not reflected in its stock price. I believe the true market value must be the combination of Acer Inc.'s investments of our subsidiaries, and Acer Inc.'s PC business.' Shih reiterated. 'By mid September, Acer Inc.'s market value was US$4.34B (NT$135B), of which the companies we have invested in accounted for US$3.8B (NT$118B). If you deduct the investment share, it leaves only US$547M (NT$17B) and seriously undervalues Acer Inc.'s true market value.' 'Acer Inc.'s PC business is also underrated. Presently investors are apprehensive with the IT industry's growth. Acer, however, is more capable than all other companies in Taiwan to re-engineer itself, and move forward with the changing economy. Acer holds an abundance of resources and has always consistently re-engineered itself to adapt to changes. For example, Acer Inc. is already driving ahead with the networking and communications business, and it has also changed its PC strategy.' 'For the Acer brand name - in Europe and the U.S., we are concentrating on the more competitive products, the LCD PCs and notebooks; in S.E. Asia and Latin America we are concentrating our efforts into increasing the market share and introducing more product lines; in mainland China we are increasing our investments and hiring more local talents. The forecast of shipments to the mainland is expected to increase by 200% this year, thus we shall become the top 3 brand name of notebook PCs and top 5 brand name in desktop PCs in the mainland.' Continuing with the Acer brand name, Shih told the investors, 'From January to August this year, Acer Inc.'s notebook PC growth have been very positive with almost 60% in the U.S., more than 40% in Europe, and an overall growth rate of 61%. We have been more cautious for the desktop PC business in Europe and North America due to the more complicated nature of logistics involved. We had withdrawn from the U.S. retail channel for desktop PCs earlier, but in mainland China the desktop PC growth was over 500%. Overall, the Acer branded PC shipment has increased by 27%.' 'The changing market strategy of one of Acer Inc.'s OEM customer led to a withdraw from their retail channel business, affecting Acer Inc.'s revenue by US$644M (NT$20B) this year, but further OEM partnerships are already in discussion and underway, therefore we expect to see a significant return to Acer Inc.'s revenue by the 4th quarter this year.' 'So you can see our investments have been positive, coupled with on-going re-engineering of the PC business Acer Inc. has been able to maintain stable profits. In the coming 5 to 10 years, we expect annual growth rates of 15~25%. I hope you will now be able to give Acer Inc.'s stock price a fair judgment, and try to look to the long term.' Acer Group website: http://www.acer.com. Contact: Che-Min Tu Tel: 886-2-8691-1084 [email protected] SOURCE Acer Inc.