| Prime News | | ![]() | ![]() | Restriction on Taiwanese Branches of Foreign Banks With Chinese Stakes Under Review
Taipei, Nov. 5, 2007 (CENS)--With more Chinese banks buying into international banks, the Financial Supervisory Commission (FSC) is reviewing the existing restriction on establishment of Taiwanese branches by foreign banks containing Chinese stakes.
The FSC has been forced to review the policy, following announcement of the Industrial and Commercial Bank of China to obtain 20% stake in Standard Bank of South Africa at NT$5.46 billion of cost, leading to question about the legal status of the latter's Taipei branch in the future.
In addition, the Bank of China reportedly has offered a takeover bid to Standard Chartered Bank, according to wire service news, although both parties have yet to confirm the deal. If the deal is authenticated, it will pose as even bigger headache for the Taiwanese regulator, in view of the British bank's heavy presence on the island, especially following its acquisition of the Hsinchu International Commercial Bank last year.
Hu Sheng-cheng, FSC chairman, pointed out that the FSC is discussing with related government agencies in a bid to formulate a reasonable and practical solution to the problem, possibly setting a ceiling on the influence level of Chinese interest in foreign banks, in terms of percentage of shareholding or seats on the board, in allowing the foreign banks' Taiwanese operations; The ceiling will be applicable to those already with business points in Taiwan and those applying to set up new business points.
Hu noted that after solution of the problem, the FSC will then look into the existing ban on Chinese banks to set up representative's office in Taiwan, which Chinese authorities has said is a major prerequisite for its decision to permit Taiwanese banks setting up branches in China. Setup of Chinese banks' representative offices in Taiwan is now legal permissible but the Taiwanese government has kept the ban in place due to its policy.
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| | ![]() | | | FSC May Relax Restriction on Sale of Private-Placement Securities
Taipei, Nov. 5, 2007 (CENS)--The Financial Supervisory Commission (FSC) is considering relaxing regulation on sale of private-placement securities, in a bid to facilitate realization of the salvage package for Cosmos Bank in dire financial strait.
A ranking FSC official revealed that the FSC has been inclined to exempt holders of private-placement securities from the ban on sales of such securities within three years following their issuance should such securities issuance be critical for capital increment program for salvaging a problem financial institution. Further probe into the conformance of the relaxation to the regulations of the Stock Trading Law is necessary, though, he added.
The relaxation has been made under the request of China Development Financial Holding, which has agreed in principle to convert its NT$7.7 billion debt claims on Cosmos Bank into shareholding but hopes to have the flexibility for disposal of the assets. Such a debt conversion is precondition for SAC Private Capital Group taking over Cosmos Bank, injecting fresh funds to keep it afloat.
The private-placement securities, however, may be sold only to institutional investors or financial institutions within the three-year period, when the securities are banned from being listed, according to the FSC official.
Meanwhile, China Development has yet to accept another request of SAC Private Capital foregoing its right to sue Cosmos Bank management within two years and confining targets for its compensation claim to only individuals, rather than the bank itself.
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| | ![]() | | | Tatung Posts Highest Earning Growth in Home-appliance Industry in First 3 Quarte
Taipei, Nov. 5, 2007 (CENS)--Tatung Co. enjoyed the highest earnings growth among domestic home-appliance firms by grabbing NT$3.51 billion (US$108.33 million at US$1:NT$32.4) in after-tax earnings in the first three quarters of this year, compared to a loss of NT$3.63 billion (US$112.03 million) in the corresponding period of last year.
Tatung chairman W.S. Lin attributed the handsome earnings scored in the first three quarters to the company's turnaround in core business in addition to the injection of earnings from such subsidiaries as Chunghwa Picture Tube Ltd., Green Energy Technology Inc., and Shan-Chih Asset Development Co.
Of the top-five home-appliance firms in Taiwan, Teco Electric & Machinery Co. was the most profitable concern by posting NT$1.34 (US$0.04) in after-tax earnings per share in the first three quarters of this year, followed by Sanyo Electric (Taiwan) Co. with NT$1.07 (US$0.03), Tatung with NT$0.8 (US$0.02), and Taiwan Kolin Co. with NT$0.64 (US$0.019). Only Sampo Corporation saw an operating loss of NT$0.63 (US$0.019) per share in the same period.
Teco posted NT$20.66 billion (US$637.65 million) in cumulative sales in the first three quarters of this year, a slight decline from a year earlier. The company registered NT$2.47 billion (US$76.23 million) in after-tax earnings in the first three quarters of this year, up over 50% from NT$1.62 billion (US$50 million) the year earlier. The company ascribed the substantial earnings growth to the contribution of such profitable products as heavy-electric products and motors.
Sanyo registered NT$5.63 billion (US$173.76 million) and NT$325 million (US$10.03 million) in cumulative sales and after-tax earnings in the first three quarters of this year, both declining from the same period of last year. The company said its earnings have been compromised by the price hike in raw materials internationally.
Thanks to the booming sales of LCD (liquid crystal display) TVs both at home and abroad, Taiwan Kolin posted NT$15.24 billion (US$470.37 million) in cumulative sales in the first three quarters of this year. The company saw after-tax earnings grow 60% year-on-year to reach NT$530 million (US$16.35 million) in the first three quarters.
Sampo posted NT$13 million (US$401,230) in core-business earnings with an 8.2% gross profit margin in the first three quarters of this year. Posting NT$8.33 billion (US$257.09 million) in cumulative sales, the company encountered an operating loss of NT$520 million (US$16.04 million) in the first three quarters of this year because of its recognized losses in its subsidiary—Sampo Technology Inc and the losses in sales of LCD TVs to the North American market.
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| | ![]() | | | Kaohsiung Harbor Struggles to Retain World No.6 Position
Taipei, Nov. 5, 2007 (CENS)--Due to harsh competition from major harbors worldwide, Kaohsiung Harbor has been fighting an uphill battle to hold onto its world No.6 position.
According to statistics compiled by the Kaohsiung Harbor Bureau under the Ministry of Transportation and Communications, Kaohsiung Harbor handled 7.58 million TEUs (twenty-foot equivalent units) of containers in the first nine months of this year, up a mere 4.41% year-on-year. But the bureau still anticipated the harbor's container-handling amount will grow 5% annually to break the 10-million TEU mark this year.
Kaohsiung Harbor Bureau director H.M. Hsieh admitted it's very difficult for the harbor to retain its world No.6 position this year because some major harbors, including the seventh-ranked Rotterdam of the Netherlands and Dubai of the United Arabia Emirates, have seen rapid growth in container-handling volume over the past several years.
Situated centrally in Europe, the Rotterdam Harbor saw container-handling volume close to that of Kaohsiung Harbor last year. In comparison, Dubai Harbor has been enjoying a 10% to 20% annual growth in container-handling volume over the past few years due to its effort in developing the logistics industry.
Hsieh warned that Kaohsiung Harbor will lose ground to Rotterdam and Dubai harbors if the latter two can achieve 10% and 15% annual growth in container-handling volumes this year. He said Kaohsiung Harbor might retreat one or two spots in global ranking this year.
The Kaohsiung Harbor's statistics showed 51% of the 7.58 million TEUs of containers handled by the harbor in the first nine months of this year were transshipping containers and the remaining 49% export-import containers.
The harbor's overseas shipping center handled 430,000 TEUs of containers in the first nine months of this year, down 4.04% from the year earlier. Hsieh ascribed the decline to mainly the dwindling container volume handled by the center in the first half of this year. But the center has seen the container-handling volume recover since July with a monthly average of 50,000 TEUs in each of July, August and September.
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| | ![]() | | | Alibaba GroupTop Executive Visits Taiwan
Taipei, Nov. 5, 2007 (CENS)--On the eve of his company's initial public offering in Hong Kong stock market, Alibaba.Group's founder and chairman, Jack Ma, visits Taiwan today at the invitation of chairman of Chinatrust Financial Holding Co., Ltd.
The top executive of the mainland China's biggest B2B website will make a speech on electronic commerce development across the Taiwan Strait during his stay in Taiwan.
Taiwanese industry watchers expected Ma to approach chief executives of the island's heavyweight enterprises to measure the size of Taiwan's electronic-commerce market.
So far, a total sum of US$450 billion has signed up to compete for the company's IPO shares, 276 times more than the company's planned allocation volume. Industry watchers estimated the company will likely raise US$1.7 billion in the IPO, the highest ever capital raise in Hong Kong stock market. Search engine Google raised US$1.65 billion in its 2004 IPO in Hong Kong.
Alibaba's ticker symbol in Hong Kong stock market is 1688, close to its company name in pronunciation.
Ma said that IPO is a new challenge to his company from the viewpoint that his company will face more pressure from customers and shareholders.
Addressing concerns that China may face economic bubble soon, Ma commented that Chinese economy has strong market backup and boom will last at least five to 10 years.
Ma purposely moved the IPO date backward to tomorrow from today in order to accept Chinatrust's invitation, proving his good relationship with Chairman Jeffery Koo of the Chinatrust Financial Holding Co.
Chinatrust's executives pointed out that Koo and Ma met for the first time at APEC Business Advisory Council (ABAC) of an APEC forum. Ma and Koo represented mainland Chinese enterprises and Taiwanese enterprises at the meeting, respectively.
Industry watchers expected Ma to use the opportunity of approaching chief executives of heavyweight Taiwanese enterprises to tap the Taiwan market.
Ma opened his business in 1999 and won the title "Young Global Leader" from World Economic Forum in 2001. In 2005, Forbes recognized him as one of the most powerful businessmen in Asia. Now, his company owns five subsidiaries: Alibaba.com, Taobao.com, Yahoo! China, Alipay, and Alisoft.
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| | ![]() | | | TSMC, Hon Hai Reportedly Team Up for LED Business
Taipei, Nov. 5, 2007 (CENS)--Some institutional investors said recently that Vanguard International Semiconductor Corp. (VISC) had won orders to make LED drive ICs on foundry basis for Fitpower Integrated Technology Inc., launching the cooperation between Taiwan Semiconductor Manufacturing Co. and Hon Hai Group.
VISC is around 25% owned by silicon-foundry giant TSMC while Fitpower is held by Hon Hai.
Hon Hai has declined to make comments on the reports while VISC's executives pointed out that their company began entering foundry production of LED drive ICs in the third quarter in light of upbeat future of the market. But they declined to identify the firm's customers.
VISC's executives said their company will branch into foundry production of high-power drive ICs for backlighting modules used in small-size LCD panels in the second half next year.
Industry watchers pointed out that that Hon Hai plans to expand its LED business into epitaxy-wafer manufacturing and VISC will likely become Hon Hai's partner in the sector thanks to its mature experience in chip-making on silicon wafers.
Institutional investors pointed out that epitaxy wafer is the crucial material for making LED chips, but Hon Hai is unlikely to equip itself with the expensive machines for the production that requires long learning curve in initial stage. Besides, the company may face excessive output for its in-house production of LED chips. Accordingly, Hon Hai will very likely team up with VISC.
VISC ran its capacity utilization at 104% last quarter and will maintain the utilization at full capacity throughout this quarter. The company shipped 233,000 wafers of chips last quarter alone, increasing 12.8% from a quarter earlier. The company expects shipment to further increase this quarter.
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| | ![]() | | | Mitsubishi and Taiwan's China Motor Tighten Partnership
Taipei, Nov. 5, 2007 (CENS)--Mitsubishi Motors Corp. of Japan recently claimed that it would try to shorten the lag between new-car launches in Japan and Taiwan (as well mainland China) and would help China Motor Corp. (CMC) of Taiwan to export more locally-made complete cars.
A senior Mitsubishi executive made the statement at a press conference to demonstrate the company's all-electric i MiVE mini car, which is scheduled to hit the road in 2010.
According to the Mitsubishi executive, Mitsubishi's three-year restructuring project has been reaping fruitful results, including a net earning for the fiscal year 2007 of 40 billion Japanese yen, four-folds that in last fiscal year. This year, Mitsubishi aims to sell 1.3 million cars worldwide.
Mitsubishi's three-year restructuring project would expire in March 2008 and the automaker is planning another three-year project, one major target of which would be overseas market growth, he added. Currently, Russia is the largest export market for Mitsubishi cars with an annual volume of about 100,000 units, while mainland China and Taiwan are also targeted places.
According to the Mitsubishi executive, his company has been partners with Taiwan's CMC for over 30 years and would continue to introduce new car models for local production in mainland China and Taiwan. In March 2008, he disclosed, CMC would begin local production of the Lancer Fortis 1.8L sedan model in Taiwan and the next model would be the 2.4L Outlander sport utility vehicle (SUV). In addition, he said, CMC is evaluating to introduce the fifth-generation Delica commercial vehicle for assembly in Taiwan.
In mainland China, Mitsubishi has invested in two affiliated automakers, the South East (Fujian) Motor Co., Ltd. (SEM, owning a 25% stake) and Chang Feng Motor Co., Ltd. (15%). CMC is the original shareholder of SEM but sold a 25% stake in SEM (with another 25% remained) to the Japanese technical partner last year. SEM is scheduled to produce the Zinger commercial van (styling designed by CMC and chassis by Mitsubishi) in China next year and the Lancer Fortis sedan in 2009.
Mitsubishi would minimize as much as possible the lag in new-model launch between Japan and Taiwan. For example, less than a month lagged between the launch of the new Lancer Fortis in Japan and Taiwan.
In the future, the Mitsubishi executive stressed, his company would no longer cooperate with other automakers except SEM and Chang Feng in China so as to secure the competitiveness of the two Chinese partners.
The Mitsubishi i MiEV stores energy for propulsion in a lithium-ion battery pack that now has 20% to 30% more capacity than the last version. The battery is produced by a new joint venture company owned by GS Yuasa and Mitsubishi. These latest cells extends i MiEV's range from 81 miles to about 99-106 miles per charge. The battery company does not exclusively supply Mitsubishi and will make energy storage systems available to any interested carmaker. Mitsubishi plans to commercially launch an electric car using these new lithium batteries by 2010.
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| | ![]() | | | HTC and Brightpoint Tie-up in Global Biz Expansion
Taipei, Nov. 5, 2007 (CENS)--HTC Corp. of Taiwan and Brightpoint Inc. of the United States recently announced that they have entered into a global master distribution agreement under which Brightpoint would provide distribution and customized logistic services to HTC on a global basis.
According to the agreement, Brightpoint will support the entire range of HTC-branded devices and help in the global expansion and penetration of HTC products and services.
HTC is a leading provider of Windows Mobile-based smart devices, while Brightpoint a global leader in the distribution of wireless devices and provider of customized logistic services to the wireless industry.
Robert Laikin, chairman of Brightpoint said that his company, together with its Dangaard businesses, is the worldwide leader in providing distribution and customized logistic services for HTC's broad portfolio of devices. "We were pioneers in developing sales channels and marketing for HTC," he stated, "and I believe that this new expanded relationship is a testament to Brightpoint's ability to provide strategic value to HTC's growing product base."
According to Peter Chou, HTC's CEO, the global expansion of the HTC-Brightpoint partnership will enable his company to bring best-in-class market efficiency including logistical, channel and retail support to growing global business as well as to achieve even-greater success across the entire range of HTC branded devices. "Brightpoint has consistently demonstrated seamless and efficient distribution of HTC devices in the countries they have previously distributed for us," Chou said, "and we are excited to expand and improve our global footprint and capabilities through this partnership."
HTC designs, manufactures and markets innovative, feature-rich smartphone and PDA Phone devices. Since its establishment, HTC has developed strong R&D capabilities, pioneered many new designs and product innovations and launched state-of-the-art PDA Phones and smartphones for mobile operators and distributors in Europe, the US, and Asia.
According to HTC, in 2006 Brightpoint (including Dangaard) handled 64 million wireless devices globally. Brightpoint's innovative services include distribution, channel development, fulfillment, product customization, eBusiness solutions, and other outsourced services that integrate seamlessly with its customers. Brightpoint's effective and efficient platform allows its customers to benefit from quickly deployed, flexible, and cost effective solutions. The company has approximately 3,700 employees in 25 countries. Including Dangaard operations, its non-audited revenue in 2006 was US$4.6 billion.
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| | ![]() | | | Taiwan Exceeds S. Korea in Exports to China in August
Taipei, Nov. 5, 2007 (CENS)--Taiwan's exports to China witnessed a sharp annual growth of 20% in August of this year to US$6.6 billion, the highest of its kind ever recorded, according to the statistics released by the Bureau of Foreign Trade (BOFT) under the Ministry of Economic Affairs (MOEA).
In the same month Taiwan-made products took a share of 10.8% of China's import market, outpacing South Korea again and becoming China's second largest import source. BOFT indicated that about two years ago S. Korea exceeded Taiwan for the first time in such market share, with the two rivals taking turns to lead ever since and in August this year Taiwan again outpaced S. Korea.
BOFT indicated that Taiwan's sharp growth in exports to China in August was mainly because of the latter's ballooning demand for information technology (IT) and electronic products in the third quarter, particularly notebook computers, consumer electronic devices, and LCD panels. As a result, Taiwan's exports to China hit a record high of US$6.6 billion, which helped boost the import market share to 10.8%, slightly higher that S. Korea's corresponding percentage of 10.7%.
BOFT, quoting China's statistics, said that Taiwan's exports to China chalked up by 20% in August, which was much higher than the corresponding 15% recorded by S. Korea and 14% by Japan, and also the highest among Asia's four little dragons.
In the first eight months of the year, Taiwan witnessed double-digit growth in trade with China and enjoyed a trade surplus of US$28.3 billion during the period, which shows a sharp annual rise of 15.5%.
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| | ![]() | | | Taiwan's Economic Indicator Stays Green for 4th Consecutive Month in September
Taipei, Nov. 5, 2007 (CENS)--Taiwan's economic monitoring indicator in September flashed the fourth consecutive green light with the composite index gaining one point to 31, hitting the ceiling of the index light and the monthly highest in three years, according to the Cabinet-level Council for Economic Planning and Development (CEPD).
CEPD indicated that the composite index was based on the performance of nine economic factors, including monetary aggregates M1B, direct & indirect finance, stock price index, industrial production, nonagricultural employment, exports, imports of machinery & electrical equipment, manufacturing sales, and wholesale, retail & food services sales. The increase of composite index in September implied a warming economic climate.
However, in the same month, the leading index edged down by 0.1%, the first negative growth ever recorded in a year. The leading index is used to forecast the economic outlook for the next three months.
CEPD officials said that the negative growth in leading index was the result of the U.S. sub-prime mortgage storm and the sharp price hikes of international oil and raw materials.
They believed that the economic climate in the fourth quarter would also be contingent on the above-mentioned external factors. If the influence from such factors weakens, the island's economic composite index may keep rising to turn the monitoring indicator "yellow-red" in the following months.
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| | ![]() | | | Elitegroup to Record Shipment of 300,000 Notebook PCs in Oct.
Taipei, Nov. 5, 2007 (CENS)--Fueled by strong demand for notebook PCs in sales seasons, Elitegroup Computer System Co., one of leading suppliers of motherboards in Taiwan, would see its monthly shipment of notebook PCs hit a new high of 300,000 units in October, and challenge a total of one million units for the fourth quarter, according to institutional investors.
In view that notebook PCs have been gradually becoming the mainstream models, Elitegroup last year acquired Uniwill Computer Corp, a Taiwanese maker of notebook PCs, and has become Fujitsu Siemens's contract supplier of the products, and won Gateway's orders for specific models.
Elitegroup projects its annual shipment of the products to reach between 2.8 million and 3 million units for this year, including 1.16 million units already recorded in the first half. The company's shipment projection is temporarily set at four million units for next year.
Writing off its bad debts in the first quarter of this year, Elitegroup posted a net loss of NT$198 million for the quarter. But the firm managed to turn profitable in the second quarter by actively improving its financial structure and seeking additional clients, scoring net profits of NT$229 million for the second quarter, and NT$236 million for the third quarter, and net profits of NT$267 million or NT$0.22 per share for the first three quarters of the year.
Besides, Elitegroup has joined Intel's supply chain for Classmate PC, becoming one of Taiwan's contract suppliers for hot-selling budget-price PCs. It has also joined forces with China' Haier Group to explore emerging markets, such as China.
With the motherboard market turning saturated, Elitegroup has adjusted its shipment projection down to 27 million units from original 30 million units for this year. As a contract supplier for both Acer and Gateway, Elitegroup plans to further scramble for orders for assembling desktop PCs in the future.
After acquiring Uniwill, which is eager to boost capacity now, Elitegroup will hence boost its annual capacity of notebook PCs to five million units in 2008 from 4.2 million units in 2006.
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| | ![]() | | | Chunghwa Picture to Set Up New LCM Plant in Southern China in 2008
Taipei, Nov. 5, 2007 (CENS)--Chunghwa Picture Tubes Ltd., the third-largest supplier of display panels in Taiwan, announced plans to set up a new plant for small- and medium-sized liquid crystal display modules (LCMs) in Fuzhou, Fujian Province of southern China to better serve its clients there, according to company sources.
The new plant is scheduled to start production between next May and June, with a monthly capacity of 500,000 units of LCMs initially. This is expected to ease tight supply of LCMs from its contract suppliers.
Affiliated with Tatung Group, a leading supplier of household electronics in Taiwan, Chunghwa Picture recently celebrated its 36th anniversary. Kay Chui, president of the company, said that the company has turned profitable since May, scoring profits of up to NT$5.1 billion in the third quarter.
Next year, over 30% of Chunghwa Picture's production capacity will be booked for making small- and medium-sized LCMs. With supply of its outsourced LCMs staying tight, the company has decided to build its own plant in southern China next year, company officials said.
Lin Sheng-chang, vice president of Chunghwa Picture, also noted that the company will use some space of its existing plant in southern China to build clean rooms to turn out small and medium-sized LCMs. This will allow the company to directly supply its clients of mobile phones there, and build LCM capacity in-house, which can fill 20-30% of its orders for such products.
Lin said that with the display panel market staying brisk, the company's production capacity has been short of demand for small-and medium-sized models by more than 30%, which can be eased after the firm's new LCM plant becomes operational.
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