I wonder how the economical situation can influence the disposition on the market. Three years ago I could hardly imagine that PC-Chips will be a highly-profitable and big mainboard maker. Now it is 2002, the joint-venture between Elitegroup Computer, PC-Chips, GBM and some other companies is not only one the biggest computer component maker, but also appears to be the most profitable one, thanks to lower than expected inventory write-offs and foreign currency exchange losses.

For the first half of the year 2002 ECS enjoyed 134% year-on-year growth with their revenues reaching approximately $925.53 million. The net income rose to $39.1 million. ECS outperformed MSI in terms of revenue by about $168.66 million, but since the company concentrates on rather cheap components, their after-tax profit was $7.6 million lower. I want to stress that ECS shown the highest pre-tax earning per share (EPS) among the first-tier mainboard makers. Their figure achieved $0.11, while the value for MSI is $0.10. Analyst estimate that ASUS and Gigabyte will not be able to beat the results of ECS.

In fact, not everything is perfect with this company. Their gross margin fell down 2.1% in the second quarter to 8.37% compared to 10.47% in the first quarter. The average gross margin for the first half of this year is 9.41%. It is said that lower gross margin is conditioned by the acquisition of notebook maker Alpha-Top. Moreover, DigiTimes reports that investors are concerned about company’s slow progress in reducing inventory and the increase in its account receivables. Given that ECS will have to write off the inventory later this year, their gross margins may fall even lower.