Quanta lifts 2007 shipment growth forecast

TAIPEI (Reuters) - Quanta Computer Inc. (2382.TW), the world's top contract maker of laptop computers, said it expected to ship up to 30 million notebooks in 2007, doubling its previous growth forecast on robust demand.

Quanta, whose major clients include top brands such as Apple Inc. (AAPL.O), Hewlett-Packard Co. (HPQ.N), Dell Inc. (DELL.O) and Sony Corp. (6758.T), expects to ship 30-50 percent more notebooks than the 20 million units it shipped last year, President Michael Wang, told Reuters in an interview.

"Notebooks are doing well this year and demand is very healthy," Wang said during Computex, the world's second-biggest computer show.

The latest forecast beats a previous company estimate of 25 percent growth, due partly to the launch of Microsoft Corp.'s (MSFT.O) new Vista operating system and rising demand from emerging markets.

"China is still growing the fastest, tracked by India and Russia, but growth from Brazil is still not that obvious yet," Wang said, adding that notebooks would continue to see two to three years of robust demand.

"Their target growth is very doable as they've gained more orders from Apple to make both MacBook and MacBookPros -- they should be able to ship 27 to 28 million notebooks this year," said JP Morgan analyst Alvin Kwock.

Quanta expected to see continued double-digit revenue growth in the third quarter versus the current quarter, Wang said.

The company has not yet announced its second-quarter results, but analysts expect the company to see revenues of T$152 billion in the April-June quarter, according to Reuters data, from T$196.4 billion a year ago.

Quanta said global notebook shipments will also hit around 95 million units in 2007, as the firm expects to maintain gross margins at slightly above 5 percent.

The estimate was slightly below IDC's forecast that global notebook shipments would reach 100 million units this year.

Quanta and its smaller cross-town rival Compal Electronics Inc. (2324.TW) make more than 40 percent of the world's notebook computers.

NON-NOTEBOOKS

Diversification is also important for Quanta as it keeps its target of making non-notebook products 25 percent of its revenue base by the end of the year.

"We have been aggressively pursuing non-notebook products and have had some success," said Wang.

Since last week, Quanta has been under media limelight after two of Taiwan's Chinese-language business newspapers reported that the firm had recently received orders from Apple for about 5 million iPhones, but Wang declined to comment on the report.

Goldman Sachs' Henry King said in a research note that Apple might consider using Quanta as the second supplier for iPhones aside from Taiwan's top electronics parts maker Hon Hai Precision Industry Co. (2317.TW), but that order details have not been finalized.

King rates Quanta at "neutral" with a 12-month target price of T$55.00, based on a 2007 earnings per share forecast, implying upside of 9 percent from its current share price.

Before the interview, shares in Quanta closed up 0.2 percent at T$50.50 on Wednesday, against a 0.13 percent gain on the broader market .TWII.

(US$1=T$33.0)