I always admire Taiwanese companies, with humble origins from an island state, yet commanding top share positions in the global market. Acer, Hon Hai, Yue Yuen …..
The acquisition of Chi Mei Optoelectronics by Innolux Display, major shareholder being Terry Guo, founder & Chairman of Hon Hai, at USD5.3Bn, dwarfed a lot of M&As in the west.
The new entity, named Chi Mei Innolux Corp., will become Taiwan’s biggest maker of LCD panels by capacity & rank it among the world’s 3 biggest LCD producers, on par with Samsung Electronics & LG Display. Our daily computer, TV and mobile phone monitors are indeed dominated by Taiwanese & Korean manufacturers.
Hon Hai Precision Industry Co. is the world’s biggest contract manufacturer by revenue. Traded under the brand name of Foxconn, it started with making knobs for Black & White TV sets and has gradually expanded to a broad range of electronics including computers, video games & mobile phones. Annual turnover is around USD80 Bn, and it employs 550k staff world wide.
Friday, November 20, 2009
Thursday, November 19, 2009
Top line is the driver
Hong Kong’s unemployment rate has dropped 0.1% and the government is hailing that recovery is not far down the road.
While the Heng Sang index has soared to 23,000 and a lot of businesses are reporting earnings ahead of forecast, it is important to articulate root cause of the “above” forecast. The chart below provides a snapshot on where US businesses stand in terms of top line sales & bottom line profits. It is not surprising that improved profits have not led to more recruitments in the US. Profits are often squeezed from cost-cutting rather than revenue or margin improvements. The good news is, most organizations should be much leaner by now to deliver more impressive results as top line soars.
A similar analysis on Hong Kong would provide a clearer picture on the correlation between business performance & easing of unemployment.
While the Heng Sang index has soared to 23,000 and a lot of businesses are reporting earnings ahead of forecast, it is important to articulate root cause of the “above” forecast. The chart below provides a snapshot on where US businesses stand in terms of top line sales & bottom line profits. It is not surprising that improved profits have not led to more recruitments in the US. Profits are often squeezed from cost-cutting rather than revenue or margin improvements. The good news is, most organizations should be much leaner by now to deliver more impressive results as top line soars.
A similar analysis on Hong Kong would provide a clearer picture on the correlation between business performance & easing of unemployment.
Tuesday, November 17, 2009
Russia, still a mystery
United Company Rusal, the world’s largest alumina, aluminum & alumina alloy company, plans to list in Hong Kong before year end.
Accounting for 12.5% of the entire global output of aluminum and 16% of alumina production, the business list some interesting figures.
1H 2008, revenue of USD8.4Bn and net profit of USD1.4Bn
1H 2009, revenue of USD3.8Bn and net profit of USD784Mn
Sharply cut cost this year, reducing production cost of 1 ton of aluminum by 25%
Debt of USD16Bn, with USD7.4Bn under a re-structuring deal.
Targets to raise USD2.5Bn from Asian investors through the Hong Kong IPO, mainly to repay creditors. Hong Kong regulators are expected to approve the listing.
The USD7.4Bn debt restructure is expected to be sealed prior to the Hong Kong listing. The deal extends over 7 years, with the first four including a “pay as you can” clause.
While we are seeing more on how business is conducted behind the bamboo curtain through Chinese IPOs, UC Ruscal’s successful listing would perhaps enable us to see what transpires behind the iron curtain.
Accounting for 12.5% of the entire global output of aluminum and 16% of alumina production, the business list some interesting figures.
1H 2008, revenue of USD8.4Bn and net profit of USD1.4Bn
1H 2009, revenue of USD3.8Bn and net profit of USD784Mn
Sharply cut cost this year, reducing production cost of 1 ton of aluminum by 25%
Debt of USD16Bn, with USD7.4Bn under a re-structuring deal.
Targets to raise USD2.5Bn from Asian investors through the Hong Kong IPO, mainly to repay creditors. Hong Kong regulators are expected to approve the listing.
The USD7.4Bn debt restructure is expected to be sealed prior to the Hong Kong listing. The deal extends over 7 years, with the first four including a “pay as you can” clause.
While we are seeing more on how business is conducted behind the bamboo curtain through Chinese IPOs, UC Ruscal’s successful listing would perhaps enable us to see what transpires behind the iron curtain.
If Volvo turns Chinese ....
I used to be a great supporter of Swedish Volvo, with its solid & stoic look, yet not too heavy nor opulent. It was also a genuine experience that the sturdy & reliable vehicle saved a relative’s life.
Somehow, Volvo is not the same Volvo since it turned American. Since Ford acquired it in 1999 at USD6.4Bn, and the business posted losses in years. It is difficult to envisage it being Chinese, but in reality, there is a high likelihood that Volvo will turn Chinese.
Geely, the strongest bidder to date, has ambitious plans for Volvo. While world-wide annual sales borders 400,000 vehicles, with a dip to a forecast of 300,000 in 2009, Geely forecasted to sell 1Million vehicles in 4 – 5 years. While 12,600 Volvos were sold in China last year, target is to sell 200,000 domestically when Geely assumes stewardship. Strategy is to add 2 – 3 bigger, more luxurious Volvos to boost global sales. It is believed that to impress Chinese consumers, Volvo needs to be “grander” and “more spectacular”. Geely aims to position it in the league of Volkswagen AG’s Audi A6 sedan, a symbol of success in China.
Ford has identified Geely as a viable suitor as China is poised to surpass the US as the world’s largest auto market. Car sales is expected to exceed 12 Mn units this year, and with the current Honda Accord or VW Passat owners trading up, there is indeed substantial potential for near-luxury cars. The market is there, it depends on how the brand & product is being managed.
Somehow, Volvo is not the same Volvo since it turned American. Since Ford acquired it in 1999 at USD6.4Bn, and the business posted losses in years. It is difficult to envisage it being Chinese, but in reality, there is a high likelihood that Volvo will turn Chinese.
Geely, the strongest bidder to date, has ambitious plans for Volvo. While world-wide annual sales borders 400,000 vehicles, with a dip to a forecast of 300,000 in 2009, Geely forecasted to sell 1Million vehicles in 4 – 5 years. While 12,600 Volvos were sold in China last year, target is to sell 200,000 domestically when Geely assumes stewardship. Strategy is to add 2 – 3 bigger, more luxurious Volvos to boost global sales. It is believed that to impress Chinese consumers, Volvo needs to be “grander” and “more spectacular”. Geely aims to position it in the league of Volkswagen AG’s Audi A6 sedan, a symbol of success in China.
Ford has identified Geely as a viable suitor as China is poised to surpass the US as the world’s largest auto market. Car sales is expected to exceed 12 Mn units this year, and with the current Honda Accord or VW Passat owners trading up, there is indeed substantial potential for near-luxury cars. The market is there, it depends on how the brand & product is being managed.
Monday, November 16, 2009
Celebrity Endorsement
In my past positions as Marketing head of different corporations, I never approved celebrity advertising. I find putting your brand or product at the discretion of another human most dangerous. Apart from the celebrity’s image being difficult to be guaranteed over time, any mis-happenings to the celebrity can easily ruin a campaign. A case in point in Hong Kong many years back was a campaign for a wedding photography salon when the featured bride became a widow only 2 weeks after the marriage. She was also in a TV commercial selling cognac, alluding to having a well-off husband who is willing to give her anything, except his nights out for cognac. The campaign had to be cut when she became a widow shortly. Mis-happeings are tragic, but as a marketeer, I never wanted to take risk.
Read recently in the newspaper that dead icons are to be put to life again to maximaze mileage on celebrity marketing. Shannon Lee, daughter & hier of Bruce Lee is recently bidding to buy back the rights to Bruce Lee’s image from GE’s Universal Studio, which had held them since the late 1980s. She formed Bruce Lee Enterprises, a licensing company, and LeeWay Media Group, a production company, to raise the dead icon’s profile.
It is reported that the Bruce Lee brand has brought in about USD 1 Mn a year. With the new push, Shannon hopes to drive it up to USD 5 – 10 Mn annually. Licensing a dead celebrity can be lucrative. Forbes figured that Elvis Presley brought in USD 52Mn, James Dean took in USD 5Mn.
One of Shannon’s first licensing projects is to provide Bruce Lee’s image to Nokia Corp to promote a new Bruce Lee phone in China. The advertising campaign features the star playing ping-pong.
Contrary to promoting sales using a deceased icon, I saw a moving coverage in Headline News today bringing to light the good deed of an icon who has sadly chosen to get off-stage.
Salute to Leslie Cheung, a brilliant talent, and a humane & lovable person!
Read recently in the newspaper that dead icons are to be put to life again to maximaze mileage on celebrity marketing. Shannon Lee, daughter & hier of Bruce Lee is recently bidding to buy back the rights to Bruce Lee’s image from GE’s Universal Studio, which had held them since the late 1980s. She formed Bruce Lee Enterprises, a licensing company, and LeeWay Media Group, a production company, to raise the dead icon’s profile.
It is reported that the Bruce Lee brand has brought in about USD 1 Mn a year. With the new push, Shannon hopes to drive it up to USD 5 – 10 Mn annually. Licensing a dead celebrity can be lucrative. Forbes figured that Elvis Presley brought in USD 52Mn, James Dean took in USD 5Mn.
One of Shannon’s first licensing projects is to provide Bruce Lee’s image to Nokia Corp to promote a new Bruce Lee phone in China. The advertising campaign features the star playing ping-pong.
Contrary to promoting sales using a deceased icon, I saw a moving coverage in Headline News today bringing to light the good deed of an icon who has sadly chosen to get off-stage.
Salute to Leslie Cheung, a brilliant talent, and a humane & lovable person!
Thursday, November 12, 2009
Au Revoir Beijing
After an absence of 5 years, I was eager to see how Beijing has progressed, with its world acclaimed architectural marvels, revamped English signages, purified air, and the vast population that has been educated to communicate & connect with the rest of the world.
Water Cube, Bird Nest, CCTV Tower, Opera House, new terminals at the airport … all impressive hard wares. In addition to the CBD taking shape like Manhattan, other concepts like building a cluster of villas to showcase different architectural designs by the Great Wall is a novel & commendable idea.
However, it is pathetic that these human successes are at the same time, dwarfed by human deficiencies. More so as these deficiencies are peculiar in China and seldom seen in other parts of the world, at least based on my own experience.
The following photos illustrate amazements I encountered during a one week trip to Beijing.
An airport (Terminal 3) shuttle train operator sleeping open leg in front of all passengers without any signs of embarrassment …..
When booking a hotel car transfer from the Commune by the Great Wall (a 5-star property managed by Kempinski) to the near-by Badaling train station, I was told by the Concierge that the hotel car is likely to get caught in traffic jam. Recommended that I take another car arranged by him at the same cost of RMB100….
. 
Finally, after mindful scheduling to visit the Great Wall in late autumn to ensure a fine walk in sunny & dry weather, the artificially induced heavy snow on November 1st made the Great Wall a post-card picture rather than slopes I could climb….
I entitle this piece Au Revoir Beijing as I hope to see an improved Beijing, both in soul & spirit, in addition to a muscular body ~~ when I re-see it again, some time down the road……
Water Cube, Bird Nest, CCTV Tower, Opera House, new terminals at the airport … all impressive hard wares. In addition to the CBD taking shape like Manhattan, other concepts like building a cluster of villas to showcase different architectural designs by the Great Wall is a novel & commendable idea.
However, it is pathetic that these human successes are at the same time, dwarfed by human deficiencies. More so as these deficiencies are peculiar in China and seldom seen in other parts of the world, at least based on my own experience.
The following photos illustrate amazements I encountered during a one week trip to Beijing.
An airport (Terminal 3) shuttle train operator sleeping open leg in front of all passengers without any signs of embarrassment …..
When booking a hotel car transfer from the Commune by the Great Wall (a 5-star property managed by Kempinski) to the near-by Badaling train station, I was told by the Concierge that the hotel car is likely to get caught in traffic jam. Recommended that I take another car arranged by him at the same cost of RMB100….
. 
Finally, after mindful scheduling to visit the Great Wall in late autumn to ensure a fine walk in sunny & dry weather, the artificially induced heavy snow on November 1st made the Great Wall a post-card picture rather than slopes I could climb….
I entitle this piece Au Revoir Beijing as I hope to see an improved Beijing, both in soul & spirit, in addition to a muscular body ~~ when I re-see it again, some time down the road……
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