| Prime News | | ![]() | ![]() | Yulon Suffers Setback in Plans to Tap Chinese Market With Own Model
Taipei, Sept. 19, 2007 (CENS)--The plan of Yulon Motor to penetrate the huge Chinese auto market via cooperation with foreign automakers has been dashed by its recent failure to have General Motors Shanghai adopt its Excelle model which it designed based on prototype of Buick model.
General Motors Shanghai has decided not to adopt the Excelle model, due to the disappointing performance of the model in Taiwan since its launch at the end of 2006, moving only 50 units monthly so far this year. Instead, it will design a new model itself, in order to revitalize its slackening sale on the face of the growing competition from Toyota and other Japanese automakers.
As a result, Yulon will have to bear the huge design and development cost for the Excelle model amounting to over NT$1 billion itself.
The failure is also a major blow to Yulon General Motors, a joint venture set up by the two parties in Taiwan in 2005, aiming to help General Motors expand its sales in Taiwan and Yulon enhance its capacity utilization rate. Moreover, in view of Yulon's extraordinary success in revising models of its Japanese auto partner Nissan, including Cefiro and Sentra, General Motors has intended to capitalize on Yulon's strong auto-design capability in rolling out revised models tailored for the greater Chinese market.
The case is another setback for the ambitious greater Chinese plan of Kenneth K.T. Yen, vice chairman and chief executive officer of Yulon, following failure to set up a Chinese joint venture with Chrysler not long ago.
The incident may further dampen foreign investments in Taiwan's auto industry. In order to help them design models catering to tastes of consumers in the greater Chinese market, several foreign automakers invested some NT$10 billion each setting up design and R&D centers in Taiwan in 2000. However, up to now only a few are still in operation, with functions of others having been replaced by their Chinese counterparts.
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| | ![]() | | | Securities Market Striving to Achieve "250" Plan
Taipei, Sept. 19, 2007 (CENS)--In order to achieve the government's goal of increasing the number of listed firms by 250 in three years, the so-called "250" plan, the GreTai Securities Market, or the over-the-counter (OTC) market, is actively soliciting share listings by Taiwanese-invested firms in China.
Wu Yu-chun, president of the GreTai Market, is scheduled to lead a group of GreTai executives visiting Taiwanese enterprises in eastern and southern China, notably those invested by Taiwanese hi-tech firms, pushing share-listing plan. This will be the second field promotional program in China on the part of the GreTai Market, following up on a similar delegation led by Chu Chu-yuan, president of the GreTai Market last year, shortly after announcement of the "250 plan" by the Executive Yuan (the Cabinet).
In its upcoming visit, the GreTai Market delegation will target at not only Chinese subsidiaries of Taiwanese enterprises, notably those in the hi-tech field, but also the "rootless" Taiwanese firms, with manufacturing, marketing, and management being carried out in China entirely, mostly featuring limited operating scale.
The GreTai Market stressed the merits of low listing costs, low threshold, and good follow-up services, in comparison with Hong Kong listing, in addition to comparatively high PE (price-earning) ratio, reaching 25 times on average now.
Moreover, the GreTai Market is endeavoring to simplify the screening of share-listing applications, as well as monitoring of companies listed on the market.
The Taiwan Stock Exchange (TSE) is also stepping up effort in soliciting share listings, in order to achieve goal of the "250 plan." It, for instance, has simplified and relaxed conditions for share listing on the market. TSE is confident of achieving the target of having 25 companies list their shares on the market this year, noting that the number of companies having listed or applied for share listing on the market has reached 26 so far this year, with the number likely to hit 30 for entire year.
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| | ![]() | | | Hon Hai Saw August Sales Break NT$100B. Mark
Taipei, Sept. 19, 2007 (CENS)--Thanks to sharp growth in sales of consumer electronics and information-technology products, Hon Hai Precision Industry Co., Taiwan's largest private manufacturer, posted NT$100.367 billion (US$3.041 billion at US$1:NT$33) in sales in August, up 40.5% year-on-year and making it the first domestic firm to see monthly sales break the NT$100 billion (US$3.03 billion) mark.
The company said it registered NT$707.587 billion (US$21.44 billion) in cumulative sales in the first eight months of this year. The company is expected to see annual sales break the NT$1 trillion (US$30.3 billion) mark this year.
Hon Hai's strong performance shows Taiwan's large-sized enterprises have advantages in competiting with smaller ones. Hon Hai spokesman Ting Chi-an attributed the company's strong performance to the advent of peak sales season for 3C products, Internet and communication equipment and consumer electronics. Of them, the replacement wave of old personal computers has fueled market demand.
Thanks to the advent of peak sales season for notebook PCs and the increased effects of Microsoft's Vista new operating system, Hon Hai saw its production lines run at full capacity in July and August.
The major contract manufacturer of Apple Computer's iPhone cellphones, Hon Hai will see monthly sales rise steadily in the remaining months of the year because of the increased sales of the Apple's new gadget.
Hon Hai anticipated it would see substantial growth in shipment of consumer electronics and PCs in the fourth quarter of this year because of customers' strong demand. The company said it would be able to see consolidated sales amount to more than NT$1.2 trillion (US$36.36 billion) this year.
With the addition of sales revenues created by four major subsidiaries, including Q-Run Technology Corp., InnoLux Display Corp., CyberTAN Technology Inc. and Pan-International Industrial Corp., Hon Hai Group would see consolidated sales reach NT$128.4 billion (US$3.89 billion) in August.
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| | ![]() | | | FSC Deregulates Underwriting of Foreign-currency-denominated Insurance Policies
Taipei, Sept. 19, 2007 (CENS)--The Cabinet-level Financial Supervisory Commission (FSC) recently worked out regulations governing the underwriting of conventional insurance policies in denomination of foreign currencies.
With the new regulations, interested insurance companies with the ratio of self-owned capital to risky capital reaching over 200% are qualified to apply with the FSC for joining the new business line.
In the early stage, the FSC would first liberalize the underwriting of the general insurance and annuities in denomination of the U.S. dollar. Payment and redemption of the policies should be settled in same currency.
According to the FSC's regulations, insurance companies eager to underwrite the new policies should not be fined over NT$3 million (US$90,900 at US$1:NT$33) over the past one year.
FSC said the denomination of foreign currency will be extended from the U.S. dollar to others if necessary.
The FSC regulations also stipulate that insurance companies are required to get approval from the authority and apply with the Central Bank of China for business operation if they want to operate the new business.
When selling the new policies, the insurance companies have to abide by relevant regulations governing the educational training of salespersons, information disclosure, and appropriateness of the insurance commodities. In addition, the insurance companies are required to provide the information of the changed value of foreign currencies and payment value in denomination of the N.T. dollar at least once a year.
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| | ![]() | | | MediaTek Increases Investment Stake in Mainland China
Taipei, Sept. 19, 2007 (CENS)--MediaTek Inc., currently Taiwan's No.1 fabless house by market revenue, recently announced it will put NT$3.2 billion (US$96 million at US$1:NT$33) into a holding company funding its overseas subsidiaries including those in mainland China.
Taiwanese industry watchers consider the financing as the company's next wave of foray into the vast mainland Chinese market following its recent acquisition of Analog Devices Inc.'s cellphone IC operation including its assets and 400 talents for US$350 million in cash.
The holding company is currently capitalized at NT$6.4 billion (US$193 million). MediaTek executives pointed out that the planned financing is aimed at funding research and development and overhead expenditures at its overseas subsidiaries since they are not generating revenues.
MediaTek opened the wholly-owned holding company in 2000. The holding company owns another two investment companies including GianTek. The two investment companies are MediaTek's major arms for overseas acquisitions. One of the investment companies has already acquired CMOS image sensor supplier Elecvision Inc. and fingerprint recognition chip supplier Aimgene Technology Co., Ltd.
GianTek 100% owns MediaTek's overseas footholds in India, South Korea and Singapore and has opened outlets in Shenzhen of Guangdong Province and Hefei of Anhui Province via wholly owned MediaTek Ltd. Also, GianTek has acquired Beijing-headquartered Pollex Mobile Holding Company's wireless software technologies.
MediaTek's acquisition is believed to help beef up its strength in developing third-generation (3G) cellular chips consistent with the mainland's TD-SCDMA standard.
People familiar with the mainland's cellphone industry analyze that after the acquisition MediaTek will likely become the mainland's biggest supplier of TD-SCDMA chips
The mainland's industry watchers estimated that 20-50 million TD-SCDMA handsets would be sold in the mainland next year. They noted that the mainland's consumption of cell phones approaches 80 million systems a year and at least half of the mainland consumers will very likely trade their current phones for TD-SCDMA phones next year. Overall next year, the mainland is estimated to consume 140 million mobile phones of various standards.
Taiwanese market-research organization Topology forecast the mainland market for TD-SCDMA handsets to reach 16 million systems in 2008 and grow seven folds to over 80 million systems in 2010.
The mainland will hold first procurement bid for TD-SCDMA phones in October. Taiwanese mobile-phone suppliers including BenQ, DBT and Inventec are planning to team up with MediaTek, ADI, and other supply chains to compete for the contract. Mobile-phone heavyweights including Nokia, Motorola, Samsung and LG will support their mainland Chinese partners to vie for the contract.
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| | ![]() | | | Gintech Energy Reportedly Wins Solar-Cell Order From Sweden AB
Taipei, Sept. 19, 2007 (CENS)--Gintech Energy Corp., a Taiwanese solar-cell startup, is reported to have won a four-year contract to supply over NT$10 billion (US$303 million at US$1:NT$33) worth of cells to Swedish solar-module maker Sweden AB and have begun shipping the goods.
Wires reported that Sweden AB had signed a contract to buy 114 megawatts of solar cells from the Taiwanese solar-cell supplier by 2010. The deal is estimated to cost NT$11.4 billion (US$345 million) based on the estimated NT$100 million (US$30 million) for per megawatt of cells.
In response to the media reports, Gintech executives have refused to comment and simply said the company has received hefty orders since it demonstrated its cell at a Milan solar-energy show late last month.
Gintech is mostly held by LED maker Everlight Electronics Co., Ltd. The solar-cell company is scheduled to be listed on the Taiwan Stock Exchange by the end of this year, likely becoming the island's first solar-cell maker to floating shares on the market. Most of its rivals are still on the OTC market.
Throughout the first eight months, the solar-cell maker had revenue of NT$3.6 billion (US$109 million), compared with NT$40 million (US$1.2 million) it had in the same period of last year.
In the first quarter this year, the company had gross margin of 25%. However, the margin slumped to only 7% or so in the second quarter. Gintech executives ascribed the recession mostly to surged cost on materials. But they expected the company's earnings to rise in the second half of the year due to declined materials costs.
The company plans to boost annual output capacity to 260 megawatts by the end of this year from current 60 megawatts. The company projects revenue goal for this year at NT$4.7 billion (US$142 million), with pretax earnings estimated at NT$550 million (US$16.6 million).
According to the government-backed Industrial Technology Research Institute (ITRI), in 2005 alone Taiwan had 15 solar-energy manufacturers generating total revenues of NT$7 billion (US$212 million). Last year, eight new entrants joined them, helping boost the revenues to NT$21.2 billion (US$642 million). So far this year, the Taiwan industry has received 18 newcomers, expecting revenues to reach NT$40 billion (US$1.2 billion).
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| | ![]() | | | U-Tech Wins Pre-recorded HD-DVD Order
Taipei, Sept. 19, 2007 (CENS)--U-Tech Media Corp., a major pre-recorded media maker, recently claimed that it has won a big order from a computer customer for pre-recorded high-definition (HD)-DVD discs and would start shipments in the third quarter.
U-Tech's next-generation DVD product shipment generated profits of over NT$10 million (US$303,030 at US$1: NT$33) in July, outstripping total earnings of NT$7.46 million (US$226,060) accumulated in the first six months.
U-Tech is a subsidiary of the Ritek Corp., the largest optical-disc manufacturer in Taiwan. Unlike most local counterparts actively transforming or diversifying product lines, Ritek has been focusing on developing next-generation optical-disc products. Ritek recently won Toshiba's order for HD DVD-R (recordable once) discs.
Besides the HD DVD order from an information technology (IT) customer, Steven Chang, chairman and CEO of U-Tech, said, U-Tech has sent product samples to some film producers and is expected to win orders for products to be sold in the Christmas season.
According to Chang, U-Tech has run ahead of local counterparts to win the Advanced Access Content System (AACS) licensing from the DVD Forum, and some of its production equipment has been shifted to HD-DVD format so as to win more next-generation DVD orders.
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| | ![]() | | | Taiwan Automakers Eye Lucrative Profits From Operations in China
Taipei, Sept. 19, 2007 (CENS)--Two local automakers are expected to enjoy lucrative profits from their reinvested affiliates in mainland China.
Statistics compiled by China Association of Automotive Manufacturers (CAAM) showed that a total of over 4.37 million new cars were sold in China in the first half, up 23.3% from the same period of last year.
Taiwan's China Motor Corp. (CMC), which now owns a 25% stake in Chinese automaker South East (Fujian) Motor Co., Ltd. (SEM, a joint venture between CMC, Fujian Motor Industrial Group, or FJMG), and Mitsubishi Motor Corp. of Japan, recently said that SEM has started producing Chrysler cars in China and is poised to enjoy profits from the contract production from the fourth quarter.
CMC is the local producer of both Mitsubishi and Chrysler car models in Taiwan. The Taiwanese firm set up the SEM with FJMG in 1995 to produce commercial vehicles and passenger cars (in recent two years) with exteriors redesigned by CMC and chassis supplied by Mitsubishi.
Last year, Chrysler, a major shareholder in Mitsubishi, also decided to contract SEM to locally produce some Chrysler products, including the Town & Country minivan (already locally produced in Taiwan).
SEM sold some 30,000 new cars in the first six months, generating profits of around NT$60 million (US$1.81 million at US$1: NT$33), compared with a loss of NT$73 million (US$2.21 million) seen a year earlier. CMC reported that SEM contributed earnings of about NT$15 million (US$454,545) to its parent company in Taiwan in the first half of the year.
SEM is scheduled to locally produce the Mitsubishi Colt Plus mini car and Lancer Fortis sedan in next two years, which is expected to generate increasing reinvestment gains for CMC.
SEM is scheduled to start mass production of the Chrysler Town & Country minivan and twin-born version Dodge Caravan, in this month; and the annual production volume is expected to reach 20,000 units. Industry sources said that SEM is expected to win more contract production orders in conjunction with Chrysler's aggressive business development in China.
Yulon Motor Co., a local producer of Nissan car models, is also expected to enjoy increasing lucrative profits from its reinvested businesses in China.
Yulon's reinvested Hua-chuang Automobile Information Technical Center Co. Ltd. (HAITEC) of Taiwan has won Dongfeng Automobile Group's attention and is expected to supply some self-developed core techniques to the Chinese conglomerate for making Dongfeng's own-brand cars.
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| | ![]() | | | Taiwan's Non-Performing Housing Loan Ratio at a Low of 1.7% in June
Taipei, Sept. 19, 2007 (CENS)--Taiwan's non-performing housing loan ratio posted at a low level of 1.7% at the end of June of this year, much lower than the average general non-performing loan (NPL) ratio of 2.5%, according to the statistics released by the Cabinet-level Financial Supervisory Commission (FSC).
In the same period, the outstanding housing loans surged 3.42% to NT$5.39 trillion (US$163.33 billion at US$1 = NT$33), compared to double-digit annual growth rates of 12.45% in 2005, 12.3% in 2005, and 10.79% in 2006.
FSC indicated that domestic banks, plagued by twin-card debt storm, have changed their operating strategies by turning spearheads to housing loan and wealth management businesses instead of consumer banking.
Focusing efforts on the real estate market, some banks have seen their outstanding housing loans almost reach the ceiling set by FSC or 30% of their total deposit holdings. Such banks are therefore forced to reduce the amount of housing loans, causing the annual growth of outstanding housing loans has in recent years to slow down.
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| | ![]() | | | Taiwan's Plastic Revolving Credit Falls Under NT$300 B. in July
Taipei, Sept. 19, 2009 (CENS)--Taiwan's outstanding revolving credit recorded by holders of credit cards stood at NT$299.299 billion (US$9.07 billion) at the end of July of this year, a sharp drop of 60% from the peak level of near NT$500 billion (US$15.15 billion) seen two years ago, according to the statistics released by the Cabinet-level Financial Supervisory Commission (FSC).
In the first seven months of this year, Taiwan's credit card issuers scored credit-card revenues of NT$34.87 billion (US$1.06 billion) and wrote off delinquent credit-card loans worth of NT$41.381 billion (US$1.25 billion). As a result, the issuers suffered a total loss of NT$6.502 billion (US$197.03 million) during the period.
Of the issuers, 18 posted earnings, with Citibank Bank and E. Sun Bank ranking first and second with net profits of NT$1.072 billion (US$32.48 million) and NT$747 million (US$22.64 million), respectively. Chinatrust Commercial Bank, boasting the largest volume of credit cards issued, saw its credit-card business turn profitable with net profits of NT$4.12 million (US$124,848.5).
Insiders note that the three major sources of income from credit cards are interest on revolving credit, transaction fees, and service charges for cash advances. In July alone, the interest income on revolving credit took a lion's share of 67% of the total income.
Recently Taiwan's credit-card issuers witnessed a sharp decline in outstanding revolving credit due mainly to the influence of the twin-card debt storm. The outstanding revolving credit peaked at NT$480.422 billion (US$14.56 billion) in July 2005, and the figure tumbled to below NT$300 billion (US$9.09 billion) in July 2007. In the same period, the total number of credit cards in use declined to 36.63 million from more than 45.47 million.
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| | ![]() | | | Acer Outpaced Dell in Sales of NB PCs in Q2
Taipei, Sept. 19, 2007 (CENS)--After acquiring the U.S.-based Gateway, the Taiwan-based Acer Inc., one of the world's leading suppliers of notebook PCs, has slightly outstripped Dell in sales of the products in the second quarter of this year, according to statistics complied by global market survey institutes.
Originally, Acer set a goal to beat Lenovo to become the world's third-largest notebook PC brand by the end of this year, and the brand seems to already make a better-than-expected progress in sales ranking in the global market for notebook PC.
Industry sources said that Acer has posted shipment of at least 1.8 million notebook PCs per month in the third quarter of this year, with shipment growth higher than Dell in the quarter. Thus, Acer will most likely widen the gap between itself and Dell to hold its second place in the global market for notebook PCs, and get closer to the leading brand HP in the second half of the year.
According to statistics complied by International Data Corp (IDC), Dell posted sales of 3.412 million notebook PCs in the second quarter of this year, higher than Acer's 2.934 million units by 478,000 units. However, if including 484,000 units posted by Gateway, Acer reversed the position to beat Dell by a margin of 6,000 units.
In the third quarter of the year, Acer saw its shipment exceed 1.5 million notebook PCs in July, and projects the figure to increase to 1.8-1.9 million units in September. Furthermore, with a boom coming in the fourth quarter, Acer is very likely to have its monthly sales break a milestone of 2 million units.
Insiders in the sector estimated that Acer is expected to score annual shipment of more than 17 million units, including 2 million units by Gateway, narrowing the gap with HP, which projects the corresponding figure of 21 million units for the year. And next year, Acer will probably see its combined shipment exceed 20 million units, continuously getting closer to HP.
To challenge HP, Acer has been actively exploring the U.S market. By acquiring Gateway, who already signed a 7-year agreement with Dell on patent licenses, Acer will penetrate the market smoothly, as a patent suit between Acer and Dell is expected to end up.
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| | ![]() | | | Wah Lee Scores Booming Sales of Raw Materials for Touch Panels
Taipei, Sept. 19, 2007 (CENS)--The Taiwan-based Wah Lee Industrial Corp., a supplier of materials for high-tech equipment, has ventured into two hot fields of touch panels and solar cell modules and enjoyed booming sales of relevant raw materials, according to company sources.
Wah Lee has received orders from High Tech Computer Corp. (HTC) and Apple for raw materials for touch panels used in hTc Touchs and iPhones, respectively, expecting sharp growth in sales of the products in 2008.
Besides, Wah Lee has obtained sole sales agency in Taiwan for the world's leading supplier of pyrolyticpolymer ethylene vinyl acetate (EVA) for solar cell modules. The firm is also actively vying for authorization from Wacker, one of the world's top three suppliers of polycrystalline.
According to securities companies, Wah Lee is expected to score net profits of nearly NT$7 per share for this year, with pretax profits of NT$4.52 per share for the past seven months of the year and sales revenue of NT$1.554 billion for August to hit a historical high.
In fact, Wah Lee has succeeded in deploying its business operations in the Chinese market, and will probably see sales from the market to account for 40% of its total sales revenue in 2008. With its simmering sales in the Chinese market and launch of new products, Wah Lee projects a growth of more than 30% in its sales revenue this year.
Chang J.C., chairman of the company, noted that Wah Lee has seen its business operations in China keep grow gradually. Meanwhile, as China's semiconductor industry is prospering, raw materials made by Wah Lee for high-tech products have been adopted by Semiconductor Manufacturing International Corporation (SMIC), Motorola and Grace Semiconductor Manufacturing Corporation operated in China.
Wah Lee's sales from China have sharply increased to command 34% of its total sales, from 19% in 2004. Furthermore, with SMIC and Taiwan-based ProMos Technologies Inc., as well as a potential client Intel, to build new manufacturing plants in China, Wah Lee's sales may surge 40% next year.
In addition, Wah Lee has ventured into making related materials for touch panels since 2001, with its key materials, including indium tin oxide (ITO), plastic substrates, hard coat films and conductive silver pastes, already being adopted by HTC and Apple to use in their handsets.
At the mean time, Wah Lee has won a sole sales agency in Taiwan for Mitsui Chemical and Madico, the world' largest supplier of solar EVA material and back sheets for solar cell modules, respectively, and has scored gross profit rate of between 14% and 15%, starting the second quarter of the year.
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| | ![]() | | | Taiwan's Department Stores See Brighter Future
The cash- and credit-card turmoil kept Taiwan's department stores in the doldrums for three years, but their business turned brighter in the first half of this year. Numerous big department stores, including Shin-Kong Mitsukoshi, Pacific Sogo, Far Eastern, and the Miramar Entertainment Park's shopping mall, are reporting improved results.
Shin-Kong Mitsukoshi's revenues dropped 8% in the first two months of the year, but the decline improved to 5.27% in the first quarter and just 1% in the first half (with revenues of NT$27 billion (US$818.18 million at NT$33:US$1). A senior store official explained that business in the second quarter was boosted by a Mother's Day buying spree in May.
The shopping mall at the Miramar Entertainment Park reported that compared with the same months of last year, sales were off by just 0.5% in January and February and growth turned positive in March. For the first quarter, the mall reported a 1% improvement and the figure expanded to 3% for the first half as a whole. A Miramar Entertainment executive noted that sales via co-branded credit cards rose by a sharp 7% in the second quarter, when the average transaction value jumped to NT$2,500 (US$75.76), up from NT$2,000 (US$60.61) in the previous quarter.
A series of promotion activities helped Far Eastern boost its revenue growth to a better-than-expected level in the first five months of the year. At Pacific Sogo, revenues rose by 16.7% in the first half.
Market observers attributed this strong performance to the robust growth of the local stock market since the beginning of the year, but they are not fully confident that the good times will continue through the second half. Interestingly, department stores performed much better in the northern part of Taiwan in the first half than they did in the south.
Statistics released by the Council for Economic Planning and Development (CEPD) show that local department stores and retail firms both enjoyed substantial revenue growth in the first half of the year, with improvements of 4.5% and 4.2%, respectively. The CEPD predicts that growth in both industries may rise to more than 6% in the second half due to the bullish stock market and the clearing away of card debt.
A government official reports that the Commerce Department of the Ministry of Economic Affairs is drawing up incentive measures to encourage department stores and retail shops to promote sales actively in order to enliven consumer spending. According to reports, department stores and retail shops may be offered subsidies or other incentives to improve their sales. (JL, August 2007) | |
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