Cheng Uei lands orders for NB batteries from HP

Taipei, May 12, 2005 (CENS)--Cheng Uei President Industry Co., one of Taiwan's leading manufacturers of batteries for notebook computer, is reported to have obtained big-ticket orders from the U.S.-based Hewlett Packard.

However, Cheng Uei hasn't confirmed the reports because it has signed secrecy with the said new customer.

With the orders from the U.S.-based Hewlett Packard, Cheng Uei, the flagship of Foxlink Group, will see shipments of the products double in the second half of this year from the level posted one year earlier. Currently the company's monthly output of NB batteries reaches 100,000 units.

In addition, Cheng Uei will begin shipping connectors used in cell-phone handsets to Europe beginning from June. With the influx of orders for NB batteries and connectors, the company estimated it would see second-quarter sales grow 40% year-on-year.

Since its inception in 1986, Cheng Uei has been focusing on design, manufacture and sales of connectors, cable assemblies, power management devices, battery packs on an OEM/ODM (original equipment/design manufacturer) basis for some of the world's leading makers of communications devices, computers and consumer electronics.

At present Cheng Uei's customers include some of the best-known and most respected industry leaders, such as Sony Ericsson, Motorola, Nokia, Apple Computer, and Microsoft. In addition to its expertise in the components, Cheng Uei and its subsidiaries have successfully developed diversified products in the area of wireless communications and optical technology, targeting to provide customers the total solution from components to turnkey products with high quality.

Seeing the low margin for the production of cell-phone battery modules, Cheng Uei has resolved to boost the ratio of NB batteries in its production lines. Jih Sun Securities estimated Cheng Uei would increase the production ratio of NB batteries to overall output of battery modules to 43 in the foreseeable future from 20 posted at the end of last year.

Cheng Uei noted it would see substantial increase of shipments of connectors used in cell phones to Sony Ericsson this year. Beginning from June this year, the company will also begin to ship the products to new customers in Europe.

Cheng Uei chairman T.C. Guo said his company saw a 50% annual growth in sales in the first quarter and second-quarter sales growth would reach 40%.

According to a report prepared by Grand Cathay Securities Investment Consulting Co., Cheng Uei will see annual sales grow 37.5% year-on-year to reach NT$26.705 billion (US$855.92 million) this year. Its after-tax earnings will grow 41.1% to reach NT$2.096 billion (US$67.17 million), or NT$8.1 (US$0.26) in earnings per share, this year.