| Prime News | | ![]() | ![]() | TSE Delegation to Solicit U.S., UK Investors to Join Taiwan Bourse
Taipei, Aug. 31, 2007 (CENS)--Representatives of 14 leading listed firms will join a delegation led by the Taiwan Stock Exchange (TSE) for a tour of the U.S. and the U.K. in September soliciting investments by foreign institutional investors in the Taiwanese bourse.
They will take part in the two investment explanation sessions, dubbed "Your Gateway to Asian Prosperity," to be held in New York and London, respectively, on September 6 and September 10, each of which will consist of three forums covering finance, telecom, and hi-tech. The New York session will be organized by UBS, while the London session will be arranged by Macquarie Securities.
The 14 companies are selected by U.S. and U.K. institutional investors, via arrangement of UBS and Macquarie, from over 20 listed firms recommended by the TSE according to their merits in corporate scale, business performance, and corporate governance.
They consist of several financial holding firms, including Fubon, Shin Kong, and Yuanta, telecom firms, including Chunghwa Telecom, Taiwan Mobile, and Far Eastone, electronic firms, including Taiwan Semiconductor Manufacturing Corp., ProMos, Vanguard International Semiconductor, ASUS, MediaTek, HTC and Delta, as well as China Steel. Two noticeable absentees are Cathay Financial Holding and Hon Hai Precision, which cannot dispatch representatives to join the delegation due to factor of timing.
Most of the companies will be represented by their chairmen or presidents. Hu Sheng-cheng, chairman of the Financial Supervisory Commission (FSC), will deliver a luncheon speech during the two sessions, explaining reform and internationalization of the Taiwanese capital market, as well as the government's goal developing Taiwan into a fund-raising and wealth-management center.
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| | ![]() | | | Lai In-Jaw to Head the Judicial Yuan
Taipei, Aug. 31, 2007 (CENS)--Lai In-jaw, incumbent justice of the constitutional court and former vice premier, will be nominated by President Chen Shui-bian as the president of the Judicial Yuan.
Meanwhile, Hsieh Tsay-chuan, also an incumbent justice, will be nominated as the vice president of the Judicial Yuan.
The nominations, along with that for eight new justices, will be forwarded to the Legislative Yuan for ratification soon. Half of the new justices reportedly will be scholars, with the other half consisting of persons engaged in practical law-related works.
Lai, born in 1946, owns a doctorate degree in law from Harvard University, boasting various stints in both the academic and government sectors, including professor at National Chung Hsing University, deputy finance minister, lieutenant governor of the Taiwan provincial government, and vice premier.
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| | ![]() | | | TSEC Invites Experts to Talk on Global Financial Market Prospects
Taipei, Aug. 31, (CENS)--To boost domestic investors' confidence in the positive development of domestic bourse amid the lingering U.S. subprime mortgage market upheaval, Taiwan Stock Exchange Corporation (TSEC) yesterday held a seminar on " Outlook and Challenge of Global Financial Market" to discuss the impact of the credit crisis on global financial marketplace.
At the seminar, presided over by TSEC chairman Wu Rong-I, attracted attendance of over 200 experts from government agencies, equity-related institutions, securities firms, futures firms, securities investment and trust funds, and foreign firms. Three keynote speakers offered their views on the global financial market from different perspectives, including Michael Petit, managing director of the Corporate & Government Ratings, Asia Pacific of Standard & Poor's; Jonathan Lee, senior director, head of Taiwan Financial Institutions, Fitch Ratings; and Sophia Cheng, managing director of Merrill Lynch Global (Taiwan) Limited.
Wu noted Taiwan stock market has been deeply internationalized and can hardly be free from the impact of the turmoil of the global financial market. According to statistics compiled by the TSEC, the ratio of foreign investments in domestic bourse to overall market value has jumped to 33.7% at the end of July this year from 16% registered at the end of 2000. In terms of trading value, the ratio climbed to 18.8% at the end of July from 4.5% posted at the end of 2000.
Michael Petit of Standard & Poor's said the credit crisis was caused by the investors' behavioral change and the heightened uncertainty in the financial market. He believed another round of Asian financial crisis wouldn't come as the overall economic fundamentals of most Asian nations have been healthier than ever in the wake of the 1997 Asian financial crisis.
Jonathan Lee of Fitch Ratings said that among the rated banks in Asia, the Bank of Thai witnessed direct exposures to the credit crisis reach 21% of its shareholder's equity, compared to a corresponding ratio of under 6% for Taiwan's life insurance companies. For most banks in Japan, Singapore, South Korea, the Philippines, Malaysia, Indonesia and India, their exposures to the credit crisis were very low, leading to a limited damage to Asia's financial market.
For her part, Sophia Cheng of Merrill Lynch said Taiwan has gradually cut over-reliance on the U.S. market over the past decade. With stable domestic market demand and the subduing of the twin card debt storm, Taiwan's financial market is expected to enjoy a healthier development in the years to come. She hoped for the government's dedication to carrying out tax reforms to make wealthy people more willing to invest in Taiwan, thus spawning a robust development of domestic wealth management market.
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| | ![]() | | | Taiwan's Machinery Output Value Estimated to Rise 10% in 2007
Taipei, Aug. 31, 2007 (CENS)--Thanks to the growth in demand for PCB (printed circuit board) manufacturing equipment, the machinery for the TFT-LCD (thin film transistor-liquid crystal display) manufacturing industry, and high-value-added precision machinery and related components, the overall production value for domestic machinery industry will increase 8% to 10% year-on-year this year, according to the Taiwan Association of Machinery Industry (TAMI).
Despite the optimistic outlook for domestic machinery industry, the TAMI also warned that some unfavorable factors, including the over-reliance on mainland China market, will continue to threaten the sound development of the industry this year. The TAMI noted mainland China has imposed a stringent measure to control imports of machinery in a bid to nurture its own machinery industry. In addition, domestic machinery manufacturers haven't yet diversified their export outlets earnestly.
According to statistics compiled by the Cabinet-level Directorate General of Budget, Accounting and Statistics (DGBAS), Taiwan's machinery industry saw overall production value amount to NT$783 billion (US$23.79 billion at US$1:NT$32.9) in 2006, representing a year-on-year growth of 9.3%. Based on the DGBAS' tallies, TAMI chairman Fred P.C. Huang optimistically predicted domestic machinery industry will see annual production value break the NT$1 trillion (US$30.39 billion) mark in 2009, becoming one of the island's NT$1 trillion industries which include semiconductor and TFT-LCD.
According to customs-cleared statistics from the Directorate General of Customs under the Ministry of Finance, Taiwan exported US$7.077 billion worth of machinery in the first half of this year, up 6% from the year earlier. Of this, the category of machine tools ranked first with export value amounting to US$1.57 billion, up 15% year-on-year. The second place went to the category of plastics and rubber processing machinery with US$460 million, up 3.5%.
In respect of export outlets, mainland China and Hong Kong ranked first by absorbing US$2.255 billion worth of domestically made machinery in the first half of this year, down 1.2% year-on-year and accounting for 31.9% of the total export value. The U.S. stood at the second place with US$1.156 billion, up 4.4% annually and commanding 16.3%.
Taiwan imported US$8.997 billion worth of machinery in the first half of this year, up a mere 0.4% year-on-year. Of this, the category of special-purpose machinery ranked first with import value reaching US$21.545 billion, down 3% and accounting for 28.3% of the total import value.
The TAMI noted the imported machines in the first half of this year were mainly used by such high-tech industries as semiconductor and 3C (computers, communications, consumer electronics).
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| | ![]() | | | Eva Airways Increases Investments in Shanghai International Cargo Airway
Taipei, Aug. 31, 2007 (CENS)--Looking to the promising prospects of mainland China market, Eva Airways Corp., the Taiwanese passenger and cargo airline owned by the Evergreen Group, recently announced it would invest 20 million renminbi (RMB or Chinese yuan) to acquire 25% of the increased capital issued by the Shanghai Air Cargo International Inc.
Eva sees its investments in Shanghai Air Cargo as a springboard to help it jump into mainland China's fledgling air cargo market, especially in the eastern China region.
In June last year, Eva Airway obtained approval from the Investment Commission under the Ministry of Economic Affairs to invest US$3.88 million to acquire 25% stake in Shanghai Air Cargo. At the same time, the big shareholders of the Evergreen Group also acquired 20% stake in the Shanghai Air Cargo.
At present, Shanghai Airlines has a 55% stake in Shanghai Air Cargo with the remaining 45% going to Evergreen Group.
Using Shanghai Pudong International Airport as operating base, Shanghai Air Cargo was formerly inaugurated in July last year. At present, the airline provides air-cargo transportation services to such cities as Frankfurt, Macao, Hong Kong, Osaka, Bangkok and Ho Chi Minh City.
Despite the booming air cargo transportation services at the Shanghai Airport, Shanghai Air Cargo sees flight fleet in smaller size than rivals. Shanghai Air Cargo posted an operating loss of 28.84 million RMB last year.
The prosperous export business in the mainland has attracted an influx of international air cargo transportation airlines. But they are encountering losses by operating the air services to the destinations of U.S. western coast because of the price hike in fuel oil and low freight charges.
To fend off price competition, since the beginning of this year Shanghai Air Cargo has changed its operating strategy to concentrate on the European routes, especially increasing services to the Frankfurt destination.
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| | ![]() | | | Wafer Works Gets Boost With Japanese Partner's Silicon Mining Right
Taipei, Aug. 31, 2007 (CENS)--Wafer Works Corp., a leading Taiwanese manufacturer of silicon ingots and wafers for solar cells, has received a leg up in its business with its Japanese partner Sumitomo Chemical Co., Ltd. having recently secured the right to mine silicon in Australia.
Australian government recently granted Sumitomo the privilege to mine and purify silica on northwestern part of Tasmania Island. Prior to the granting, the company had already acquired a 3% stake in crystal grower Solargiga, a joint venture of Wafer Works and a mainland Chinese solar-energy manufacturer, for 300 million yen (US$2.5 million at US$1:116 yen).
Taiwanese industry watchers expected Sumitomo's mining privilege to become a windfall to Wafer Works and Solargiga by offering them less expensive raw materials. Wafer Works, they said, will become first Taiwanese solar-energy manufacturer to have access to silicon-mine resource.
Sumitomo will abstract silica, or silicon dioxide, from earth and them refine the substance to 99% purity. Purified silicon is the raw material for making poly silicon crystal, based on which solar cells are made. The Japanese company will start the production next month.
Taiwanese industry watchers pointed out that Sumitomo's acquisition of the mining privilege mirrors the trend of global solar-energy industry that the manufacturers are competing to equip themselves with resources spanning from upstream to downstream sectors in order to enhance competitiveness.
This trend is illustrated by the partnership among Sumitomo, Wafer Works and Solargiga. Taiwanese industry watchers pointed out that the partnership will help Sumitomo complete its deployment in the solar-energy industry quickly and assist Solargiga in vertical integration with Sumitomo's distribution network.
Sumitomo is a globally leading supplier of poly-silicon wafers, its affiliate Sumco is now the world's biggest supplier of silicon wafers. Sumitomo is also a major shareholder of U.S. solar-energy maker Hemlock and European poly-silicon supplier REC.
The partnership makes Solargiga the first solar-energy manufacturer jointly owned by Taiwanese, mainland Chinese and Japanese investors. Industry watchers pointed out that the cooperation among the three sides suggests global solar-energy manufacturing pivot is moving to Asia from Europe and the United States.
Some mainland Chinese press media recently reported that Solargiga will likely make initial public offering (IPO) in the mainland in September through underwriter BNP Paribas. The media estimated the company's underwriting profit to be about US$300 million, posting potential profit of at least US$10 per share to Wafer Works.
Wafer Works, founded in 1997, is Taiwan's No.3 silicon-wafer and silicon-ingot maker, trailing only Green Energy Technology Inc. and Sino-American Silicon Products, Inc. Its earnings for the first half of the year are estimated to surge by at least 2.5 folds year-on-year and its revenue for July, at NT$448 million (US$13.7 million at US$1:NT$33), hit a new high for the 17th consecutive month.
With the mainland venture, Wafer Works will expand its output capacity to 100 megawatts of solar power by the end of this year from current 20 megawatts and 200 megawatts next year.
Industry watchers pointed out that eco-sensitive energy sources such as solar power have recently emerged as hot subjects driven by climate change caused by green-house gas emissions. According to market-research organization Photonics Industrial Development Association (PIDA), Taiwan's revenue from solar-cell and module manufacturing topped NT$10 billion (US$303 million at US$1:NT$33) last year and is projected to exceed NT$50 billion (US$1.5 billion) this year.
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| | ![]() | | | Tainergy Tech Buys Solar Cell Manufacturing Equipment From Centrotherm
Taipei, Aug. 31, 2007 (CENS)--Tainergy Tech Co., Ltd., a solar-cell venture mostly held by automation-system maker Kenmec Mechanical Engineering Co., recently signed a contract to buy production equipment from German supplier Centrotherm.
Kenmec opened the solar-cell maker in April this year to design, make and sell solar-cell modules and systems. The deal is estimated to inject NT$1-2 billion (US$30-60 million at US$1:NT$33) a year into Centrotherm's revenue.
Tainergy will begin volume production with Centrotherm-made equipment in March next year.
Tainergy plans to increase production lines to four in 2010 to boost output capacity to 200 megawatts of solar power from next year's 50-60 megawatts. In six years, the company will boast an output capacity of 1,000 megawatts.
Centrotherm counts Motech Industries Inc., E-Tone Solar Tech, Gintech Energy Corp. Unitech Printed Circuit Board Corp., Sun Well Solar Corp., and Mosel-Vitelic Inc. as its major Taiwanese customers in addition to Tainergy.
Centrotherm now depends on solar-cell equipment for 95% of its sales, and equipment for making thin-film solar cells for the remaining 5%, according to the company's president, Hans Autenrieth.
Authenrieth estimated Taiwan's solar-energy output capacity will approach two gigawatts of solar power next year, suggesting the Taiwan industry is taking off.
Kenmec separately signed a deal to work with the German equipment supplier on thin-film solar cell equipment.
Kenmec and its affiliates are projected to generate consolidate revenue of NT$5 billion (US$151 million) throughout this year and NT$10 billion (US$303 million) next year.
Kenmec sets Tainergy's capitalization at NT$1 billion. So far, only NT$5 million (US$151,000) has been paid. The company plans to increase the paid-in capital to NT$500 million (US$15 million) in few weeks from the end of this month.
Bright future in solar-energy market has lured many heavyweight Taiwanese manufacturers like United Microelectronics Corp. (UMC), Hon Hai Precision Industry Co., Ltd. and CMC Magnetics Corp. to put money into the business.
According to the government-backed Industrial Technology Research Institute (ITRI), in 2005 alone Taiwan had 15 solar-energy manufacturers turning out revenue totaling NT$7 billion (US$212 million). Last year, eight new entrants joined them, helping boost the revenue to NT$21.2 billion (US$642 million). So far this year, the Taiwan industry has received 18 newcomers, expecting revenue to reach NT$40 billion (US$1.2 billion).
The industry has also persuaded many local equipment suppliers into expanding into solar-energy equipment sector. In addition to Kenmec, Marketech International Corp., Mirle Automation Corp. and Gallant Precision Machining Co., Ltd.
Kenmec has begun producing automated material-feeding, sorting, and inspection equipment for solar-cell production. The company has also put money into wireless-equipment supplier Aphelion Communications Inc., which specializes in Wii and WiMAX products.
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| | ![]() | | | Asustek Set for Smoother Sailing After OEM-biz Spinoff
Taipei, Aug. 31, 2007 (CENS)--After its recent announcement of its separation project, Taiwan's Asustek Computer Inc., the world's largest motherboard supplier is enjoying increasingly smooth operation.
Asustek's OEM business will spin off their branded business under the new names of Pegatron Technology Corp. (PC-related manufacturing) and Unihan Technology Corp. (casing, modules, and non-PC goods) starting January 2008.
Industry sources said that the shipment of Asustek's ASUS own-brand notebook PCs is expected to hit a new monthly high in August; while the firm is also expected to win big-ticket contract order from Dell for notebook PCs and order from HP for desktop PCs.
So, the sources said, Pegatron is expected to have a chance to generate revenue of over US$20 billion from OEM production.
Some industry insiders also said that Pegatron has the chance to win Dell's contract order for 14-inch notebook PCs and is expected to deliver over two million units of such product to the American brand in 2008. In addition, they added, the new subsidiary is also expected to win Hp's desktop PC order.
Henry King, an analyst for Goldman Sachs Group Inc., is optimistic about a favorable business climate in the second half for the motherboard market, though which is expected to suffer some affects from the shortage of some parts and components. According to King, however, the motherboard demand growth in the third quarter will be limited and Goldman Sachs adjusted down its forecast for third-quarter motherboard shipment growth rate to 16% from 17% originally predicted. In addition, King said that the August shipment growth rate would be stronger than that in July.
Some factors have caused supply shortage of key PC parts such as power management ICs, printed circuit board (PCBs) etc., according to Goldman Sachs, which are due mainly to some big international brands increasing their order volumes for desktop PCs; higher-than-expected market demand for notebook PCs; and Advanced Micro Devices, Inc. (AMD) is scheduled to adjust down its prices of some central processor models.
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| | ![]() | | | Sprint Nextel to Push HTC's CDMA-version Touch-screen Device
Taipei, Aug. 31, 2007 (CENS)--Sprint Nextel, the third-largest telecom carrier in the United States, is scheduled to push the code division multiple access (CDMA) version of the HTC Touch, the Voque, a device made by Taiwan's High Tech Computer Corp. (HTC) whose fingertip-oriented control system invites comparison to Apple's iPhone, according to industry sources.
HTC is the world's biggest maker of handsets running on Microsoft Corp.'s operating systems.
The HTC Voque's transmittance speed will reach the third-generation (3G) standard, higher than iPhone's 2.5G, making it a major bundled model in Sprint's high-speed service sales packages.
Industry sources said that HTC has prepared sufficient parts and component inventory for manufacturing about 100,000 Voques per month, showing the company's confidence in future's sales in the American market.
AT&T, the biggest GSM carrier in the U.S., pushed the 3G BlackJack PDA phone and won hot market responses in the first half, and continuously pushed Apple iPhone for a even-better sales performance, triggering strenuous efforts by CDMA carriers target to win back more market shares.
In addition to its 3G high-speed transmittance, the smart, stylish and versatile HTC Voque brings together a broad variety of communication, entertainment, and professional capabilities that enable mobile consumers to balance work and play. The new HTC-designed homescreen provides one-touch access to emails, text messages, calendar appointments, and contacts, as well as current weather conditions and forecasts for hundreds of cities around the world.
The HTC Touch/Voque is the first device to feature TouchFLO, a 3-D user interface that allows users to move through on-screen options by sweeping their fingers across the screen, or scrolling up and down using a fingertip, HTC said.
Industry sources said that HTC currently sells about 150,000 unit of the GSM/GPRS version HTC Touch in Europe and Asia per month, and they estimated that sales volume of the Voque in North America market is expected to reach about two-thirds that of the HTC Touch.
In addition to Sprint Nextel, Verizon Wireless, the largest CDMA telecom carrier in the U.S., also plans to push five cellphone models run by Microsoft's operating systems in the fourth quarter.
Verizon Wireless's new-model list will include the SMT5800 and XV6800 supplied by HTC's American distributor UTStarcom. The former is a CDMA-version mid-price smartphone model (with GSM-version model having been pushed in Europe in the first half), while the latter being a high-level PDA phone.
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| | ![]() | | | Major Taiwan Banks See Drop of NT$1.1 B. in New Home-Purchasing Loans in July
Taipei, Aug. 31, 2007 (CENS)--Taiwan's five leading domestic banks, including Bank of Taiwan, Taiwan Cooperative Bank, First Commercial Bank, Hua Nan Commercial Bank, and Chang Hwa Bank, witnessed combined new home-purchasing loans of NT$40.298 billion (US$1.22 billion at US$1 = NT$33) in July, a drop of NT$1.153 billion (US$34.94 million) from the corresponding figure posted a month earlier and a new low since May of 2006, according to the statistics compiled by the central bank here.
The average interest rate charged by the five banks in the same month for new home-purchasing loans sharply increased by 6.3 basis points from the previous month's 2.406% per annum to 2.469%. This meant that domestic home purchasers have to pay more interest if they apply for housing loans, not to mention the higher down payment.
The Cabinet-level Financial Supervisory Commission (FSC) has included the home-purchasing loans on its point-check list since May 1 of this year and will punish the banks with much higher housing-loan ratio and much lower housing-loan interest rates.
Market observers indicated that the outstanding housing loans extended by some domestic banks are approaching 30% of their total loans, with such percentage being the ceiling set by FSC. So, the banks could not offer more new housing loans and this was one of the main reasons for the downward trend of new housing loans in July.
To avoid risk, some banks have reduced loans to high-priced residences and some have suspended loans extended to home purchasers buying suites with space of under 15 pings (1 ping = 36 sq/ft). However, those that purchase housing units located along the massive rapid transit lines or in areas with convenient transportation can get loans as high as 80%-85%, with others able to borrow below 80% of purchasing prices.
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| | ![]() | | | Bullish Stock Market Fuels Taiwan's Savings Deposits in July
Taipei, Aug. 31, 2007 (CENS)--Due to hectic trading in local bourse, Taiwan's outstanding deposits of securities depository accounts and outstanding local currencies deposited in the banking system by foreigners both hit new highs in July.
The former witnessed monthly increase of NT$115.2 billion (US$3.49 billion at US$1 = NT$33) to reach NT$1.1513 trillion (US$34.89 billion), breaking the NT$1 trillion (US$30.3 billion) mark for the second consecutive month; and the latter posted monthly rise of NT$34.3 billion (US$1.04 billion) to total NT$302 billion (US$9.15 billion), according to the statistics compiled by the central bank here.
Market observers indicated that bullish stock market was the main reason for the sharp rise of outstanding deposits of securities depository accounts and New Taiwan dollar-based foreign accounts. As a result, the annual growth of M1B, the narrow money supply indicator, climbed up to 9.14%, the highest of its kind in two and a half years.
To join the bullish stock market, many investors have transferred their time deposits to regular savings deposits. In July, the outstanding time deposits at financial institutions here dropped sharply by NT$143 billion (US$4.33 billion), showing the first fall in annual growth since February of 2004; while savings deposits rose NT$98.8 billion (US$2.99 billion). The movement of the money helped boost the annual growth of M1B up to 9.14%, outstripping that of M2, the broad money supply indicator, for the sixth consecutive month.
In the same month, the annual growth of M1A stood at 5.93%, remaining unchanged at the level posted a month earlier; and M2 edged up by 0.02 of a percentage point to 4.65%. The rise of M2 was mainly because of the growth of investments and loans extended by banks during the month, with net increase of NT$31.6 billion (US$957.57 million) in loans granted to individuals and of NT$78 billion (US$2.36 billion) to private enterprises.
The central bank explained that M1A refers to the currency in circulation, checking accounts, and savings deposits; the M1B is M1A plus the passbook savings deposits; and the M2 is the M1B plus quasi-money, including term and saving deposits, foreign currency deposits, and postal savings deposits.
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| | ![]() | | | TPV, AmTRAN Are World's Top-two Suppliers of LCD TVs
Taipei, August 31, 2007 (CENS)--The Taiwan-based TPV Technology Ltd. and AmTRAN Technology Co., Ltd. have become the world's top two suppliers of liquid crystal display (LCD) TVs, commanding a share of 19.9% and 17.4%, respectively, of the global market for outsourced LCD TVs in the first quarter of this year, according to statistics compiled by DisplaySearch.
In fact, TPV has been benefiting from its big client, Philips, which has increased orders to it, and AmTRAN from its own brand, Vizio, which first became the most hot-selling LCD TV brand in the North American market in the second quarter of the year.
According to an analysis by DisplaySearch, global shipment for the second quarter amounted to 16.2 million units, with 3.5 million units, or 22%, supplied by specialized contrast suppliers, including TPV, AmTRAN, Quanta Computer Inc., Jabil Circuit Inc., Vestel Group and Wistron Corporation.
Quite a few LCD TV brands, such as Dell, Grundig, HP, Polaroid, Vizio, ViewSonic, and Westinghouse, have been totally outsourcing production, while some raising portions of outsourced LCD TVs, like Philips, which has had more than 40% of its products sourced from contract suppliers in the second quarter.
There are also some differences between production strategies used by LCD TV brands to explore new markets, with some deciding to outsource LCD TVs in lights of certain regions or models, and some to build manufacturing plants in local markets for in-house production.
However, most leading brands still prefer to turn out LCD TVs in house, making contract suppliers of LCD TVs absorb only 22% of shipment worldwide in the second quarter of the year.
Of the world's top 10 contract suppliers, seven come from Taiwan, including TPV, AmTRAN, Wistron, Proview Electronics Co., Kolin Inc., Nexgen Mediatech Inc. and Quanta, which together command 67% of the world market for outsourced LCD TVs.
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| | ![]() | | | Simplo to See Shipment of Battery Packs for NB PCs Rise 30% in 2008
Taipei, August 31, 2007 (CENS)--Simplo Technology Co., Ltd. the world's largest supplier of battery packs for notebook PCs, foresees its shipment of the products to rise not less than 30% in 2008, according to Raymond Sung, chairman of the company.
Seeing its sales soar by around 50%, Simplo reported pretax profits of NT$1.064 billion, or NT$5.77 per share, for the first half of this year, sharply growing 61% from a year earlier.
Simplo projects that its sales revenue for the third quarter of this year to reach between NT$5.85-5.95 billion, up 14% from a quarter earlier and 30% from a year earlier, with pretax profits of between NT$627-637 million, or NT$3.38-4.84 per share, and net profits of NT$476-484 million.
Including the pretax earnings posted for the first half of this year, the company is expected to score more than NT$9 per share, or net earnings of over NT$7 per share, over the past three quarters this year. This makes the company most likely to challenge earnings equal to its capitalization in five years.
Facing a deficiency in supply of battery cells in the industry, Sung noted that world's major suppliers of the products have moved to expand production capacity by 15% for the time being. However, if they fail to activate new production lines smoothly, the situation won't improve until mid-2008.
Besides, after Hon Hai Group acquired controlling stakes in it, Simplo will carry out a modest production strategy on its battery line, managing to have the line, which is mainly shipped to four major clients, including Wistron Corp., Quanta Computer Inc., High Tech Computer Corp. and Hon Hai Group at present, contribute 4-5% to its total sales next year, with a gross profit rate of less than 10%.
Simplo has resumed operation of six production lines at its plants in China, since the plant caught a fire early this August. At the moment, the plant turns out 35,000 battery packs per day, or 700,000 to 800,000 units per month on average, and will boost the figure up to one million units in October, and 1.2 million in November. Simplo has set an annual shipment goal of 23 million battery packs for notebook PCs for this year, commanding a 26% share of the global market, and projects its share to move up to 28% next year.
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