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June 24, 2017

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Reforms & transitions leading to new dawn for Acer in Q2: Shih

TAIPEI, Taiwan -- At a public engagement yesterday, Acer Inc. (宏碁) Chairman Stan Shih (施振榮) stated that a new dawn for the company is poised to break around the second quarter of this year, following sweeping transitions and reforms, with performance also expected to improve as new products and services are launched during the same period.

According to Shih, early results in performance improvements may be seen in the company's financial statements for the first quarter and earnings are expected to see favorable development as the company's new products and cloud-based computing services hit the market.

Most notably, Shih remarked that the choice of Hu Jing-ying (胡競英) as the company's incoming chief financial officer represents a firm resolve to revitalize the management structure with new blood and transition towards software and services.

Hu's background in a wide array of sectors including finance, accounting and the media industry will bring valuable insight to help Acer navigate and prosper in the increasingly globalized world, said Shih. Acer's transition into a new company may no longer be limited within the confines of technological innovation, but also the way internal corporate finances are managed and portrayed before the eyes of investors, Shih said. In addition, Acer's entry into software business would require new doctrines in corporate financial management, in particular the leveraging of incomes tangible and intangible.

With two master's degrees in computer science and business management, Hu was lauded as a "scholarly starlet" during her career in the film industry. Hu later went on to lead the then-beleaguered Videoland (緯來電視) TV station from red to black, and later rose to the CEO position at Asia Television Limited (亞洲電視) in addition to founding an accounting firm in Hong Kong.

Currently, moral remains high at the company, with progress conferences scheduled weekly, Shih said. With the company's cloud-based computing platform garnering acclaim from international clients and stellar earnings prospects deriving from high margin software licensing sales, Acer's performance is expected to improve markedly in the second quarter.

Foreign Investors Retain Misgivings Over Acer's New Product Line

Meanwhile, ahead of the company's global product launch event in New York on April 29, Deutsche Bank analysts yesterday voiced that they remain unimpressed by Acer's lack of innovation in design. As a result, analysts stated that Acer's target share price would remain at NT$14.

Deutsche Bank analysts stated that Microsoft's move to waive operating system licensing fees for its hardware partners producing Windows 8-based smart phones and tablet computers with screens under 9 inches would have little effect on Acer's performance prospects, as 85 to 90 percent of the company's mobile device offerings are running Android. Furthermore, Acer's entry into the Windows 8 mobile device niche would require considerable lead time in product design and manufacturing, and that amid heightened competition in the field the company may be compelled to slash its retail prices, nullifying the benefits of the estimated 5 to 7 percent cost savings on Microsoft's operating system.

On the cloud-computing front, Deutsche Bank stated that they do not see tangible profits in the next one to two years, as earnings are expected to be derived from hardware that are bundled with services, but lauded the endeavor as a step towards a more viable path.

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