Table of Contents
Overview: PC outlook weak amidst mobile convergence 3
PCs miss mobile internet opportunity but silver linings do exist 4
Our Picks: Buy Compal, Sell Acer/Quanta in the mobile internet age 11
Valuation: Switching to a P/B-ROE based methodology 19
Compal: Still challenged but up to Buy on mean reversion potential 23
Acer: Restructuring takes time; down to Sell on weak financials 26
Quanta: Cloud business unable to save NB/tablet weakness; to Sell 29
Lenovo: Market share expansion success mostly priced in; Neutral 32
ASUSTeK: Top line growth intact but margins at risk; stay Neutral 35
Wistron: Product diversification beneficial but fully valued; Neutral 38
Pegatron: Sales growth on track but OPM challenging; stay Neutral 41
Disclosure Appendix 44