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| Thursday, 13 August 2009, 17:00 HKT/SGT | |
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Source: IRG | |
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HONG KONG, Aug 13, 2009 - (ACN Newswire) - The following is an Asian excerpt from IRG's TMT Weekly Market Review Aug 3 - Aug 9. IRG is a financial advisory and investment firm focused on the core growth sectors in Asia with particular focus on the telecommunications, media and technology (TMT) sectors.
- The global semiconductor market expects a steady rise in the price and demand for DRAM chips, according to ISuppli. The report forecasts that the price of DRAM chips would climb 10.2 percent in the third quarter. Although this is down from the 20-percent-level price rise in the previous quarter, the upward movement suggests that the DRAM market is recovering. According to iSuppli, the DRAM market contracted 19.5 percent on-quarter in the first quarter of this year but rebounded at 37.9 percent in the second quarter. The market will continue to grow at the 20-percent level into the third and fourth quarters, making a full recovery, the researcher forecast. The rising prices are attributable to plunging supplies caused by ongoing restructuring in the industry since early this year, coupled with stockpiling by PC manufacturers for the year-end high demand season.
- South Korean chipmakers including Samsung Electronics and Hynix Semiconductors have exceeded 60 percent share in the global semiconductor market during the second quarter of this year. South Korea accounted for 61 percent of major market shares for D-Ram in the second quarter of this year, up 2.9 percentage points from 58.1 percent in the first quarter of 2009, according to an analysis by Samsung Securities. Meanwhile, market share of three Taiwanese manufacturers, including Powerchip, ProMOS and Nanya Technology was found to have dropped to 13.8 percent in second quarter of 2009, down 8.6 percentage points from 22.2 percent year-on-year.
Japan
- The world's No.1 plasma TV maker Panasonic Corp reported a net loss of 52.98 billion yen ($559 million) in April-June 2009, down from a 73 billion yen profit a year earlier. For the year to March, the company kept its net loss forecast of 195 billion yen (US$2.0 billion), half of last year's 379 billion yen loss (US$4 billion), but worse than analysts' estimate of a 185 billion yen loss (US$1.5 billion). Revenue for the April-June quarter fell 26% to 1.595 trillion yen (US$16.8 billion) from 2.152 trillion yen (US$16.7 billion) a year earlier, partly because of slow sales of digital cameras and flat-panel television sets. Panasonic is still targeting TV sales of 15.5 million units this fiscal year, up from 10.05 million last year, to lift its market share to 12%. As part of its TV, Panasonic will aggressively push plasma TV sets greater than 50-inches diagonal in the U.S., Europe and Chin given such screen sizes earn higher margins. It also will seek to cut production costs.
- Sony Corp. will offer two new e-reader devices priced at US$199 and US$299. This will intensify competition in a burgeoning market dominated by rival Amazon.com. Sony plans to cut prices on best-selling e-book titles in its online store to US$9.99 from US$11.99, matching the discount price offered by Amazon for users of its Kindle device and Barnes & Noble's Fictionwise. Sony's new Readers, called the PRS-300 and PRS-600, are expected to go on sale later in August at such U.S. retailers as Best Buy Co. and Wal-Mart Stores Inc. The smaller Sony device costs US$100 less than Amazon's least-expensive Kindle.
- NTT Docomo became the top net subscription gainer among Japan's mobile phone service providers in July for the first time in three years, wresting top spot from Softbank Mobile which had retained it for 26 months. NTT Docomo secured 143,600 contracts on a net basis. Softbank Mobile posted the second largest net subscription gain of 137,600 contracts thanks to brisk sales of Apple's iPhone 3GS handset launched by Softbank Mobile in late June.
- Elpida Memory said that it plans to more than double its output of advanced DRAM chips for high-speed computers and servers next month. Elpida will boost output of its DDR3 chips to about 75,000 wafers per month starting in September, up from its current output of 20,000 to 30,000 wafers per month. As spot prices of DDR3 chips are at about US$2.10, up around 30 percent from May, Elpida and rivals Samsung Electronics and Hynix Semiconductor started to shift more weight to the new chips.
- Elpida Memory Inc. has signed a contract to receive around 30 billion yen (US$307 million) in investment from the state-backed Development Bank of Japan. The government picked Elpida as its first recipient for de facto public funds under its emergency financial aid program introduced amid the global economic downturn. Elpida will issue two types of preferred shares to the DPJ and the payments will be made by late August. If the investment fails, the government says it will cover 50 to 80 percent of the losses incurred by the DBJ with taxpayers' money.
- Japanese electronics manufacturers and chip makers are stepping up efforts to boost production of semiconductor chips and liquid crystal display panels to meet burgeoning demand partly due to the government's ''eco-point'' shopping incentive program. The consumer electronics appliance manufacturers include Sharp, Toshiba, NEC Electronics, Renesas Technology and Fujitsu. Semiconductor and LCD panel output has returned to levels before the global financial turbulence as progress has been made on inventory adjustments amid a pickup in demand. Eco-points are awarded for the purchase of highly energy-efficient products. The points can be exchanged for merchandise vouchers or electronic money cards with one point basically equivalent to 1 yen (US$0.10). Sharp boosted LCD panel production capacity at its No. 2 Kameyama factory in Mie Prefecture by 10 percent, starting in August, and that the workers there had given up their summer holidays. The panels are used in Sharp's Aquos televisions and supplied to other manufacturers.
Korea
- KT Corp.'s second-quarter net profit nearly tripled because of narrower foreign-exchange related losses and reduced marketing costs. KT posted a net profit of 456.1 billion won (US$372 million). KT Corp. absorbed its mobile unit in early June to become the country's dominant player in both the wireless and fixed-line markets. Sales increased 17.7 percent to 3.564 trillion won (US$2.9 billion). Operating profit dropped to 1.1 percent because of weaker revenue from fixed-line operations and broadband internet services. As sales were rising in July, the company will try to achieve sales and profitability growth in the second half.
- SK Telecom is planning to sell its 15.3 percent stake in Virgin Mobile USA, ending one phase of that firm's foray into the U.S. mobility market using the mobile virtual network operator model. SK Telecom also had been an investor in the failed Helio venture launched in conjunction with EarthLink.
- Samsung Electronics and Hynix Semiconductors are raising chip prices to meet a rising demand for DRAMs. Samsung said that the company is planning to raise their products' prices by an additional 5 percent to 10 percent this month. The Korea Times has reported that there is an expected growth in the demand for PCs from the third quarter, which is a traditionally busy season for the electronics industry. Samsung's key clients are Dell, Hewlett-Packard and Apple of the U.S. Chipmakers negotiate prices with their customers roughly twice a month. The NAND flash memory market has also begun to stabilize and officials expect it to move toward a supply-demand balance.
- Hynix Semiconductor announced the appointment of Ji Bum Kim as the new Chief Marketing Officer. J.B. Kim replaces Dae Su Kim, who has currently resigned. In his new position, J.B. Kim will be responsible for all Sales and Marketing functions at Hynix, covering DRAM, NAND Flash, and CMOS Image Sensors.
India
- Bharti Airtel Ltd. has extended its exclusive merger talks with South Africa's MTN Group Ltd. from July 31 to Aug. 31. The two companies had talks again over a complex US$23 billion combination. If ever the merge occurs, it would create a telecom giant with combined annual revenue of more than US$20 billion and more than 200 million subscribers. This is the second merging attempt of the two companies. Last year's attempt failed as they couldn't reach an agreement on the structure of the deal. There has been no decision to acquire any shares. The implementation of transaction has been taken by the boards of either Bharti or MTN. The extension of the exclusivity period happened as Bharti finds it difficult to sell the deal to MTN shareholders under the earlier structure. MTN and its shareholders would buy a 36 percent stake in Bharti Airtel. The Indian firm will buy a 49 percent stake in the Johannesburg-based company.
- Bharti Airtel Ltd. has approached State Bank of India for separate loans of US$1 billion and 50 billion rupees (US$1.04 billion). The mobile phone operator plans to raise debt to fund a possible merger with South Africa's MTN Group Ltd. Bharti Airtel is currently in talks with MTN over a complex US$23 billion combination that would create one of the 10 largest companies in the mobile telecommunications industry. The state-run bank doesn't need to seek approval from the country's capital market regulator.
- Bharti Airtel Ltd. is planning to bid for the Sri Lankan mobile network of Luxembourg-based Millicom. The move could make it the second largest mobile phone operator in the island nation. Bharti Airtel hasn't yet put in a firm bid for the Tigo network but will do so in a couple of weeks.
- Bharat Sanchar Nigam Ltd. (BSNL) has called bids from companies to implement a mobile number portability gateway. The bidders should have supplied, installed, integrated, tested and commissioned the gateways in the networks of at least two telecom-service providers anywhere in the world. A company providing mobile number portability manages a customer's service and billing when the customer changes the service provider without changing the phone number.
- Tata Communications Ltd., requires raising more funds to support its capital expenditure, but also needs to cut debt as interest cost is already high. The Tata group company is planning 100 billion rupees (US$2.09 billion) of capital expenditure over three years. The company's interest costs nearly doubled to 3.01 billion rupees (US$63.1 million). Tata Communications's debt-to-equity ratio climbed to 1.31 in the same period from 0.66 a year earlier as the company funded expansion of its undersea cable network with debt. The Indian government, which controlled the company before the Tata group bought a stake in 2001, still owns 26 percent of Tata Communications. Tata Communications holds 773 acres of surplus land. The land wasn't included in the government's stake-sale deal with the Tata group, but the company's other shareholders could benefit when it is sold.
- Mahanagar Telephone Nigam Ltd. has sought initial bids from global technology firms, or their Indian units, for a franchise deal to sell its broadband wireless services based on the worldwide interoperability for microwave access, or WiMax, technology. The deal will be on a revenue-sharing basis.
Malaysia
- Maxis Communications Bhd. is close to naming the bookrunners for its planned listing in Malaysia. The planned initial public offering could raise about US$2 billion. If it goes through, it would likely be the largest in Malaysia for several years and underline the growing appetite for initial public offerings in Asia as the region begins to emerge from the global economic crisis. Malaysian Prime Minister Najib Razak has also been vocal in his support for Maxis's listing. The company would help bring in investors to the Malaysian stock market. The company has not yet formally reached an agreement with any of the banks. The company plans to invest an additional US$5 billion in its Indian joint venture, Aircel Ltd., to expand the mobile services network in the country.
Philippines
- Globe Telecom Inc. has signed a credit facility for US$75 million that will be used to finance its capital expenditure. Citibank N.A., Deutsche Investitions-Und Entwicklungsgesellschaft MBH, and Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden N.V have jointly provided the facility.
- Globe Telecom Inc. said net profit in the second quarter rose to 16 percent from a year ago as revenue improved on a larger mobile subscriber base and lower corporate income tax. Globe had net profit of 3.25 billion pesos (US$67.7 million), as revenue increased to 15.73 billion pesos (US$328.9 million). Second-quarter results lifted first-half profit to 7.2 billion pesos (US$150.5 million) as cellular subscribers increased to 25 million from 22.7 million at the end of June 2008.
- Globe Telecom's mobile telephone subscriber base is expected to rebound in the coming quarters after taking a hit in the second quarter as the company trimmed marginal subscribers. Globe ended the second quarter with 25.02 million subscribers, down from the end-first quarter level of 25.64 million, with nearly all the reduction coming from its low-end TM brand. This is the second time in five years that Globe had to purge its subscriber base of low quality subscribers that move from one service provider to another after exhausting the load credits included in a SIM card which are either sold at a token price or given out for free.
- Philippine Long Distance Telephone Co. had net profit rose as the mobile subscribers rose and the income tax rate lowered. PLDT's net profit increased to 10.14 billion pesos (US$211.3 million). Revenue climbed to 36.51 billion pesos (US$762 million). Core profit was up 11 percent on year, leading the company raise the target for the year. PLDT saw softness in demand by late June. Campaign spending ahead of next year's presidential elections could also provide a leavening effect on consumer spending while the earnings share from the 20 percent stake in power distributor Manila Electric Co. should be income accretive. The company plans to launch new products in the rest of the year, hoping to drive earnings and counter a possible slowdown in demand.
Singapore
- StarHub Ltd. said second-quarter net profit rose 21.1 percent on higher service revenue and lower operating expenses. Net profit for the three months ended June 30 was S$77.8 million (US$54.2 million). Operating revenue for the quarter rose 0.2 percent while operating expenses fell 2.4 percent on year. StarHub expects its 2009 service revenue to be maintained at around the 2008 level and retained its dividend guidance to pay a minimum annual cash dividend of S$0.18 (US$0.13) per ordinary share for the year.
Austaralia
- Telstra Corp.'s new boss, David Thodey had negotiations with the government regarding the planned national broadband network. Buying Telstra shares, and the group's upcoming annual results are an opportunity to add to positions. Telstra's net profit may rise at around 3 percent to A$3.8 billion (US$3.2 billion). Telstra could benefit, or at least not lose out, from the government's telecommunications revolution if Thodey plays his cards right. Prime Minister Kevin Rudd outlined plans for a new A$43 billion (US$36 billion) fiber-to-the home network, which will likely leave large parts of Telstra's fixed line network redundant. Australia's broadband speeds currently lag well behind many other advanced nations, and Canberra wants Telstra to vend some of its fixed line network and infrastructure into the ambitious network to keep the cost down.
- Australian Communications Minister Stephen Conroy appointed KPMG and McKinsey & Co. as joint lead advisers on a proposed multibillion-dollar broadband network designed to provide high-speed Internet to much of Australia. The pair was chosen from a field of nine for their experience in broadband, large-scale complex infrastructure projects, and the telecommunications sector. Australia's center-left Labor government in April unveiled plans to build a high-speed fiber-to-the-home broadband network, with investments from the private sector, but is yet to make any decisions on how the network will look, or what changes to legislation will be needed. KPMG and McKinsey will play a key role in bringing the ambitious project to life, advising the government on suitable operating and governance arrangements for NBN Co. Ltd. The firm created to deliver the planned network which has ownership caps, ways to attract private sector investment, and network design.
Topic: Research / Industry Report
Source: IRG
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