| Prime News | | ![]() | ![]() | FSC Bans Investments in Red-Chip Stocks
Taipei, Sept. 10, 2007 (CENS)--Domestic securities brokers will not be able to accept commissions of their clients for investing in Chinese securities, constituent stocks of Hang Seng Chinese enterprise index, and Hong Kong and Macao securities issued by companies with over 30% of Chinese capital, according to instruction issued by the Financial Supervisory Commission (FSC) last Friday (Sept. 7).
In addition, the FSC also decreed that when undertaking commission from their clients for investing in overseas mutual funds, securities brokers must confine the investment targets to those approved by the FSC for sale or fund raising in the domestic market. Commissioned investments in foreign bonds are also restricted to those with BBB and higher ratings. The requirements are contained in the revised "regulations on the scope and investment targets for securities firms in undertaking commissioned deals in foreign securities."
Presently, the Taiwanese government bans local people buying Chinese stocks, as well as stocks of Chinese-invested enterprises listed in Hong Kong and Macao bourses, but has failed to offer clear definition of the latter stocks until now, enabling domestic securities firms to capitalize on the gray area in arranging investments by local people in the so-called red-chip stocks in Hong Kong, cashing in on the rally of the latter bourse in recent years.
The revised regulation defines all listed firms in Hong Kong and Macao with over 30% Chinese stakes, including both direct and indirect ownership, as Chinese-invested enterprises.
The definition is looser than the stipulation of the "Statute for Cross-Strait People-to-People Relations," which defines all enterprises with over 20% Chinese stakes as Chinese-invested enterprise and forbids them to invest in Taiwan.
FSC officials explained that FSC's definition complies with the definition of "red-chip stocks" by the Hong Kong Stock Exchange, which has obtained agreement of the Mainland Affairs Council.
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| | ![]() | | | RMBS Issuance Will Top NT$100 B. in 2007
Taipei, Sept. 10, 2007 (CENS)--Despite the sluggishness of the asset-based securities market and the shadow of the U.S. subprime housing-loan market, many domestic banks have planned to float residential mortgage-based securities (RMBS) in the fourth quarter this year or the first quarter next year, in order to liquidate their realty loans, which have approached the 30% ceiling of deposits for many.
Banks with RMBS issuance plans include Cooperative Bank of Taiwan, Union Bank, E. Sun Bank, Sunny Bank, Ta Chong Bank, and Hwatai Bank, totaling over NT$80 billion in scale, which, plus NT$51.1 billion issued in the first half, will boost total RMBS issuance for entire 2007 to over NT$100 billion.
Major purpose for the RMBS plans is to liquidate housing loans, so that banks can cut down their housing-loan positions and obtain extra lending funds. Due to the bullish housing market in recent years, many domestic banks have seen their housing loans near the 30% ceiling, including Cooperative Bank of Taiwan, Union Bank, Far Eastern Bank, Taishin Bank, and Bank Sinopac.
In addition, RMBS issuance can help banks cut risk assets, enhance capital adequacy ratio, and augment returns on equity.
The Cooperative Bank of Taiwan, for instance, has decided to float NT$15 billion of RMBS, in order to cut its realty-loan ratio to 25%, from near 30% now, and secure NT$10 billion of extra fund for lending. The issuance will be undertaken by Standard Chartered Bank.
E.Sun Bank will follow up with issuance of NT$10 billion RMBS and Sunny Bank is ready to issue NT$12 billion of RMBS by year end. Union Bank, Bank Sinopac, and Cathay United Bank are also evaluating RMBS plans.
However, due to the outlook of further interest-rate hikes and the effect of the U.S. subprime housing-loan upheaval, domestic banks may have to set higher interest rates for their RMBS in order to solicit subscription from local people.
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| | ![]() | | | Mainland China Imposes Anti-dumping Taxes on Imported BPA From Taiwan
Taipei, Sept. 10, 2007 (CENS)--Beginning from Sept. 30, the mainland China's Ministry of Commerce will levy anti-dumping taxes on imported bisphenol A (BPA) from Taiwan, Japan, South Korea and Singapore for a period of five years.
Domestic manufacturers subject to the punitive taxes of between 5.3% up to 6% are Nan Ya Plastics Corp., Chang Chun Plastics Co. and Taiwan Prosperity Chemical Corp. A high-ranking official of the Bureau of Foreign Trade under the Ministry of Economic Affairs said the imposition of the punitive taxes should have little impact on domestic firms because they are subject to lower anti-dumping taxes than rival producers in South Korea and Japan. Only the peer producers of Singapore are subject to a lower anti-dumping taxes than domestic manufacturers.
The BOFT said this is the 13th case of anti-dumping charges imposed by the mainland since March 2002. There are six others under mainland authority's investigations.
The mainland currently charges 5.5% customs tariff on imported BPA. That means the three above-mentioned domestic producers of BPA are required to hand in 10.8% up to 11.5% taxes while exporting their products to the mainland. Others who haven't respond to mainland's investigation should have to hand in an average of 37.1% anti-dumping taxes.
BPA is a basic material for the production of high-polymer products, including epoxy, polycarbonate, heat stabilizer for polyvinyl chloride, insecticide, oil paint, and ultra-violet-ray absorber. At present, mainland China is the largest export outlet for domestically made BPA.
According to statistics compiled by the BOFT, Taiwan exported US$180 million worth of BPA to mainland China (including Hong Kong) in 2006, accounting for 56.2% of Taiwan's total exports of the product.
At present, Nan Ya is the island's largest producer of BPA with annual output amounting to 290,000 metric tons, followed by Chang Chun at 135,000 metric tons, and Taiwan Prosperity at 250,000 metric tons.
Nan Ya said it produces BPA mainly for its own production of epoxy with some going to its affiliate—Formosa Chemical & Fibre Corp.'s polycarbonate plant.
Nevertheless, the anti-dumping investigations launched by mainland's Ministry of Commerce in 2004 showed Nan Ya had begun selling BPA to the mainland since the first half of 2003. In addition, Chang Chun and Taiwan Prosperity each exported over 70% of their output to the mainland in 2003.
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| | ![]() | | | FPG to Set Up Stainless-steel Plant in Zhangzhou of Mainland China
Taipei, Sept. 10, 2007 (CENS)--Formosa Plastics Group (FPG) will set aside NT$32 billion (US$969.69 million at US$1:NT$33) to set up an integrated stainless-steel plant in Zhangzhou of Fujian province, mainland China with the name Tienlung Co., which is to be registered in Samoa.
The proposed stainless-steel plant is designed to have an annual production capacity of 750,000 metric tons, which will begin construction by the end of this year and start mass production in three years.
The participation of the FPG in the production of stainless steel is expected to lead to harsher competition in the Asian stainless-steel industry.
Having learnt of the FPG's move to set up a stainless-steel plant in Zhangzhou, I.S. Lin, chairman of Yieh United Steel Corp., Taiwan's largest producer of the product, has asked the FPG not to poach personnel from his company. It is said the FPG has offered bidding forms to some international-class equipment producers in a bid to procure necessary production equipment.
The proposed stainless-steel plant was initiated by Chien Shing Stainless Steel Co., one of Taiwan's leading manufacturers of stainless steel, several years ago. But Chien Shing has resolved to locate its plant in Vietnam, with the FPG taking over the entire investment project.
Despite the aggressive attitude of the FPG, Taiwan's largest integrated steel producer—China Steel Corp. said it has no plan to engage in the production of stainless steel at home and abroad.
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| | ![]() | | | ASE, Mitsui Hightec Sign Technology Sharing Pact
Taipei, Sept. 10, 2007 (CENS)--Chip assembler Advanced Semiconductor Engineering (ASE) Inc and Japanese lead-frame supplier Mitsui High-tec Inc. recently signed a pact to allow them to share intellectual properties and technologies they develop based on Mitsui's proprietary hybrid manufacturing technology (HMT).
It is a five-year term agreement. During the five years, the two companies are eligible to use each other's intellectual properties and technology in design and manufacturing developed based on HMT.
The contract will allow ASE, currently the world's No.1 chip packaging and test house, to sharpen its competitiveness in area array package (AAP) field. According to ASE, HMT is a version of AAP using lead frame, which is more flexible than multi-row quad flat no lead (QFN) packaging in pin distance and consistent with JEDEC and JEITA design standards. HMT uses copper frames, making it more reliable than QFN in thermal dissipation and electrical performance.
ASE executives pointed out that their company's cooperation with Mitsui on HMT will help the two sides upgrade the technology and create high added value for the technology.
Mitsui executives pointed out that HMT has been highly recommended by chip packaging and test houses and the cooperation with ASE will push their company to develop more advanced products.
The two companies did not disclose financial cost for the deal.
On the same day it announced the cooperation deal, ASE also announced its consolidate revenue for last month was a record NT$9.3 billion (US$284 million at US$1:NT$33), up 9.84% from a month earlier and 3.49% from the same period of last year.
Throughout the first eight months of this year, the company had total revenue of NT$62.3 billion (US$1.8 billion), dipping 9.8% year over year. Last quarter alone, the company's consolidate revenue amounted to NT$23.3 billion (US$707 million). The company has projected revenue for this quarter to rise 15%. But, insiders expected the growth pace to be higher from the growth rate of the company's August revenue.
ASE's packaging capacity is completed booked and its testing capacity is growing strained thanks to swarming orders from communications, personal-computer, consumer-electronics segments. Institutional investors estimated the company's go-go revenue growth pace would likely continue into next quarter.
Addressing the company's recent 100% acquisition of affiliate ASE Test Ltd., some institutional investors think the acquisition will help slightly push up ASE's earnings per share and liquidity.
ASE already held a 51% stake at the chip tester before it announced it would buy the remaining 49%.
According to the company's executives, behind the 100% acquisition of the affiliate is the company's efforts to streamline its organization structure to pare down financial burden and promote unified brand name.
Taiwanese industry watchers pointed out that the acquisition will help boost ASE's share price since the chip tester has never posted loss since its establishment in 1995 in Singapore. AS'`s executives their company's profitability will considerably increase by including ASE Tester's earnings into its.
ASE Test specializes in test service for high-performance wireless and logic chips, operating 777 testing machines and 402 binding machines. Among its major customers are Altera, Qualcomm, CSR, Infineon and VIA Technologies.
The company's revenue averages US$500 million a year. Throughout the first half of this year, the company had revenue of US$212 million, gross margin of 28.2%, operating income of US$23.16 million, pretax earnings of US$31.44 million and after-tax net income of US$15.37 million.
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| | ![]() | | | Taiwanese Satellite Telecom Equipment Makers Report Shining August Results
Taipei, Sept. 10, 2007 (CENS)--Taiwan's leading suppliers of satellite-telecommunications equipment saw their revenues for August grow briskly, with some scoring record revenues.
In August, Zinwell International Corp. had revenue of NT$1.38 billion (US$31.4 million at US$1:NT$33), a gain of 40% from a month earlier and soaring 160% year on year. The result is far better than industry watchers' expectations of NT$900 million (US$27 million).
Driven by strong demands globally and new orders from Brazil and Europe, the company's shipments of set-top boxes grew over 50%, leading to the company's exploding revenue growth for August. Institutional investors estimated the company delivered 150,000 boxes last month, increasing from 100,000 systems it shipped a month earlier. They projected the company to ship over 200,000 boxes throughout this month and deliver 450,000 set-top boxes in the third quarter.
As to low-noise block (LNB) business, the company shipped around 1.1-1.2 million systems in August, on par with the volume it shipped a month earlier.
Thriving shipments pushed up the company's gross margin to 29.4% in the second quarter from the first quarter's 26.85%.
Thanks to shipment ramp-up since June this year, Microelectronics Technology Corp.'s August revenue hit a new high of NT$672 million (US$20 million), surging 3.3% from a month earlier and 42% from the same period of last year. The August result helped swell the company's total revenue for the first eight months this year to NT$4.4 billion (US$134 million), up 14.41% from the comparable period of last year.
Microelectronics executives have projected the company's revenue for the third quarter to soar at least 20% to NT$2 billion (US$60 million) partly because the company began increasing shipments of a new product it co-developed with European customer Echo Star and peak season has arrived.
Last quarter alone, the company had record revenue of NT$1.65 billion (US$50 million), up 14% from quarter earlier
The company's internal calculation shows its after-tax net income for the first half this year was NT$178 million (US$5.3 million), or NT$0.42 per share.
Undergoing monthly revenue recessions throughout the first half this year, Skardin Industrial Corp. saw its revenue for August post at NT$368 million (US$11 million), increasing 70% from a month earlier and 45.9% year on year. The August result helped boost the company's total revenue throughout the first eight months of this year to NT$1.7 billion (US$52.9 million), slipping 1.82% from the same period of last year.
Institutional investors have projected the company's revenue for the third quarter to increase at least 50% from the second quarter and revenue for the second half to surge 50-70% from the first half. They estimated the company's shipments for the second half to double from 1.1 million systems of the first half, and maintained their expectations that the company will deliver 3.1 million units of machines throughout this year.
Throughout the first half of this year, the company reported revenue of NT$1.1 billion (US$35 million), pretax earnings of NT$125.6 million (US$3.8 million), and after-tax profits of NT$96.5 million (US$2.9 million).
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| | ![]() | | | U-Tech Diversifies Into Shimmering-effect Plastic Film Biz
Taipei, Sept. 10, 2007 (CENS)--U-Tech Media Corp. of Taiwan recently claimed that its full-color shimmering-effect plastic plate (or film) products have successfully tapped into the top-three global cellphone brands' supply chains and the company would begin shipment of such products in the third quarter.
U-Tech is a subsidiary of Taiwan's largest optical-disc manufacturer Ritek Corp. to produce mainly pre-recorded media. With the new product category and the coming of the high season of pre-recorded media, the company said that its profit margin is expected to reach about 30% in the third quarter.
Steven Chang, chairman and CEO of U-Tech, pointed out that U-Tech is the world's second producer of full-color shimmering-effect plastic plate products trailing only a South Korean counterpart.
Such new product, according to U-Tech, can generate special shimmering effects which are applied on keypads with delicate artwork. The innovative plates can be applied onto various kinds of 3C (computer, communication, and consumer electronics) products and peripherals such as cellphone housing and keypads, optical mouse pads, etc. to replace similar effects achieved by traditional electro-plating or costly methods.
Chang pointed out that the margin of such special films is much higher that pre-recorded media products and U-Tech is under talks with many 3C product makers.
The chairman also said that the third quarter is a traditional high season for pre-recorded media, which would lower the production costs with upgraded equipment-utilization ratio, leading to the much-improved profit margin during the period than that in the first half.
All of U-Tech's pre-recorded media capacity has been filled with orders, Chang said, and his company does not exclude the possibility to seek capacity support from parented Ritek.
Some institutional investors said that the sales ratios of pre-recorded media makers are often 30-70 in the first and second quarters, respectively.
Facing the coming of next-generation DVD disc market, Chang said, his company has made full preparations for mass production, including in-house front production processes and rear-section production by the blu-ray equipment at Ritek.
Industry sources said that the increasingly thinning margins of pre-recorded media have been driving makers to diversify product lines or transform into other fields, including the solar-cell products (Infodisc Technology Co., Ltd.), shimmering-effect films (U-Tech), or even electric hand tools (Feng Sheng Technology Co., Ltd.).
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| | ![]() | | | Hotai Ranks as Most Profitable Auto Seller in 1st Half
Taipei, Sept. 10, 2007 (CENS)--Hotai Motor Co., the local distributor of locally made and imported Toyota and Lexus cars, ranked as the most profitable auto dealer among Taiwan Stock Exchange (TSE)-listed counterparts in the first half.
In the first half, the company registered revenue of NT$38.77 billion (US$1.17 billion at US$1:NT$33), down 6.8% from a year earlier, but net earnings of NT$2.01 billion (US$61.03 million), up 7.64%, generating earnings per share (EPS) of NT$3.69 (US$0.11).
Hotai's first-half operation results were quite impressive as the domestic new-car sales plunged by 20% during the period, making it the only auto dealer to report year-on-year earning growth.
Hotai attributed its profit growth amid declined revenue in the first six months to product structure changes, including increased sales of imported luxury Lexus models and unit-prices of new locally-made cars.
Hotai registered pretax earnings of NT$335 million (US$10.15 million) in July; accumulated pretax earnings of NT$2.91 billion (US$88.3 million) in the first seven months; and accumulated pretax EPS of NT$5.33 (US$0.16).
Another TSE-listed auto dealer (also manufacturer) who won investors' attention is Sanyang Industry Co., Ltd., which locally makes Hyundais and SYM brand motorcycle products. Sanyang has been reporting stable profit performance with its non-automobile businesses, especially in Vietnam.
Industry sources said that Sanyang has been aggressively developing powered two-wheeler (PTW) sales in Europe in recent years and the efforts paid off in the first half thanks to the strong euro that increased Europe's buying power from Taiwan.
In the first six months, Sanyang's PTW export volume increased by 30% while its domestic volume rose by 10% from a year earlier.
Sanyang's Vietnamese subsidiary Vietnam Manufacturing Export Processing Co. Ltd. (VMEP), the second-largest PTW manufacturer in the nation, sold about 90,0000 units in the first half.
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| | ![]() | | | Taiwan May See Net Increase of 24,000 Employees in Q4
Taipei, Sept. 10, 2007 (CENS)--Taiwan's job market is estimated to see net increase of 24,000 workers in the fourth quarter of this year; of which 16,000 workers will be recruited by manufacturing industry, according to an investigation done by Cabinet-level Council of Labor Affairs (CLA).
Lin Lee-jen, director at the Statistic Department of CLA, indicated that the growing demand for labor in the fourth quarter is due to the simmering market demand in the fourth quarter from electronic industry that has to gear up to meet the expected booming orders for the Christmas and New Year holiday season. Related industries including electronic parts, video & audio items, home appliances and telecom devices are also expected to see ballooning orders for the holiday season. So, 26.3% of the manufacturers of the said industries will need more workers in the fourth quarter.
In addition to electronics and the related industries, other sectors that may also recruit new employees include wholesales & retailing, technical & professional service, and financial & insurance, which are estimated to add labor force of 4,100 persons, 3,100 persons, and 2,400 persons, respectively, during the quarter.
In the fourth quarter Taiwan's job market is estimated to hire a total of 57,000 new employees but also slash 33,000. The dismissal of workers will be mainly due to the downsizing of temporary and part-time workers, which are estimated to reduce more than 10,000 jobs due to the end of school summer vacation.
Besides, the construction industry will slash 2,700 jobs in the same quarter due to the completion of several projects before the end of the year. Other sectors, such as, sports and hospitality/leisure, may downsize their labor force by 2,300 persons and 700 persons, respectively.
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| | ![]() | | | Demand for White-Collar Temps Grows Manifold in Q4
Taipei, Sept. 10, 2007 (CENS)--The Taiwan job market increasingly needs temporary help, not only for low-echelon blue-collar workers, but also for highly-paid white-collar professionals.
Banks and service industries have been the major sectors that need temporary help and the manufacturing sector has today also witnessed rising demand for such supply. The 104 Job Bank, one of Taiwan's leading job market website, witnessed a fourfold annual rise in want ads seeking white-collar talents for temporary jobs in the fourth quarter of this year.
A senior official at the 104 Job Bank indicated that its web site started to post earlier this year want ads seeking temps as system engineers for Japan and information technology (IT) engineers for Vietnam, which are believed needed to work for Taiwanese enterprises in the said two countries.
The official said that more and more job seekers today favor overseas temporary jobs offered by renowned enterprises, which usually pay higher pay and offer better corporate benefit to overseas workers who can work independently, are competent in local languages, handle contingencies, and stand up under heavy pressure.
The want ads seeking overseas temps on 104 Job Bank website are mainly to fill IT software engineers and sales or marketing representatives posts, with locations of such jobs spread worldwide, including Hong Kong, Japan, the United States and countries in Southeast Asia.
The employers who advertise for temps on 104 Job Bank are mostly foreign enterprises and large-sized domestic companies, with 26.7% being listed domestic companies and 24.8% foreign firms.
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| | ![]() | | | Epson to Place More Orders With Taiwanese Suppliers
Taipei, Sept. 10, 2007 (CENS)--Seiko Epson Corp., one of the world's leading suppliers of printers, is to consolidate relationship with its contract suppliers in Taiwan by increasing orders to them in the future, according to company sources.
Meanwhile, with sluggish growth seen in the U.S., European and Japanese markets, Epson plans to carve out new market niches by promoting models that boast environmentally-friendly concept, and already introduces such models with so-called "Epson EcoPoint," an authorization of environmentally friendly products by Epson, in Taiwan.
At the moment, Epson assemblies all products in house and spends around NT$10 billion every year sourcing some components and parts from its contract suppliers in Taiwan.
However, the world's major markets, including Japan, for printers have turned sluggish for recent years, but other emerging markets in Asia have slightly grown by about 7%.
According to Epson, the market for printers has declined due mainly to the fact that printers are still regarded as merely peripheral equipment for PCs. In fact, suppliers of printers reinforce features of their products, such as an environmentally-friendly function, to segment the market demand.
Sure Lee, president of Epson Taiwan, noted that Epson's printers can totally cut power consumption by 936 million megawatts per year, and reduce the emission of carbon dioxide by 580,000 kilograms, enabling users to save electricity bills of NT$3.4 million a year. Also, Taiwan is the Epson's first market for its printers with Epson EcoPoint.
Epson said it has commanded a 70% share of the consumer market for printers, and will promote several new models with multiple functions, like faxing, to tap the market for commercial models.
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| | ![]() | | | TECO to Set Up Plant in China to Produce LCD TVs
Taipei, Sept. 10, 2007 (CENS)--TECO Electric & Machinery Co., Ltd., a Taiwan-based supplier of household electronics, is to build a new plant in China for the production of liquid crystal display (LCD) TVs, according to company sources.
TECO's new plant will be located near a LCD module (LCM) plant of the Taiwan-based AU Optronics Corp., one of the world's leading suppliers of display panels, so as to take advantage of an integrated supply chain there.
The plant is scheduled to start mass production in the second quarter of 2008, with annual production capacity of one million LCD TVs set for the first-stage construction plan. This will help TECO become the largest Taiwanese supplier of LCD TVs operating in China.
In fact, TECO plans to take the new plant in China as its major export base for the global market, and as a foothold for further exploring the Chinese market.
TECO noted the new plant will occupy a land area of 230 acres at the first stage of the construction plan, and the area will be increased to 500 acres at the third stage. Of the plant's total annual output of three million LCD TVs, 80% will be for export and 20% for domestic sales in China.
Not long ago, TECO, Taiwan's Kolin Inc. and the U.S.-based Syntax-Brillian Corporation announced formation of a strategic alliance to integrate resources and reinforce cooperation among the three parties, aiming to better tap the global market for LCD TVs. Therefore, TECO becomes one of contract suppliers for Syntax-Brillian's Oleveia-branded LCD TVs, and its new plant in China will play an important role in this regard.
In view of a booming season at the end of a year, TECO will switch some manufacturing facilities of its Taiwan plant to the new plant in China, hoping to kick off production of the world's hottest 32-inch LCD TVs as soon as possible.
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