If fictional television mobster Tony Soprano kept convenience-store hours, that might sum up Chunghwa Telecom Co Chairman Mao Chi-kuo's (
Nicknamed "7-11" by colleagues because he arrives at work early and leaves late, 53-year-old Mao has little patience with underlings who don't get the job done.
"People know they better complete Chairman Mao's assigned jobs or they will get whacked," said Teng Tien-lai (鄧添來), head of the government's telecommunication department, where Mao worked until taking the reins at Taiwan's largest phone company last year.
Mao needs both qualities now. Shares in the state-controlled company tumbled almost 40 percent since it first went public last October. Government attempts to further cut its stake have stalled as global phone stocks slid.
That decline in Chunghwa's share price is five times the drop in the key TWSE index during the same period. Many investors don't expect the stock to rebound anytime soon as rivalry mounts and mobile phone rates fall.
"Chairman Mao is highly regarded, but he might be too close to the problem," said James Liu, who helps manage NT$13 billion (US$395 million) at ING CHB Securities Investment Trust Co.
"Chunghwa is still a government agency and its competitiveness is still a concern." Three new rivals received fixed-line licenses last March, ending Chunghwa monopoly. One of them, New Century InfoComm Corp (
In the mobile phone market, open to competition since 1996, Taiwan Cellular Corp (
In response, Chunghwa cut international rates by about a third last month and reduced local long distance charges by more than a fifth, seeking to retain customers even if that means lower revenue.
And sales are sliding. Mao, a former Vice Minister for Transport and Communications who holds a doctorate from the Massachusetts Institute of Technology, said earlier this month that they will drop to NT$185.2 billion this year, though they rose 2.2 percent in the first quarter.
"It's not a stock we're advising people to buy," said Carl Berrisford, an analyst at Indosuez WI Carr Securities Ltd in Taipei, one of four analysts who follow the company. All rate the company "sell."
The long-delayed government share sale is another reason investors avoid the stock. Last October, Chunghwa hired Goldman Sachs Group Inc, Merrill Lynch & Co and UBS Warburg LLC for the sale of a 15.6 percent government stake that aimed to raise US$3.8 billion, making it Asia's biggest share sale outside Japan and Australia.
Since then, the government has managed to offload just 2.87 percent of the company, and that only to domestic investors. The sale has been delayed at least twice, once on such short notice that Hong Kong's Shangri-la Hotel posted announcements of a lunch presentation Jan. 9 before it was scrapped.
Chunghwa said Friday it earned NT$11.5 billion in the first quarter on sales of NT$46.1 billion.
The company, which didn't provide comparative figures because it changed its financial year to the calendar year from one ended in June, said it expects to meet an earnings target of NT$4.16 for the full year. In the 12 months ended last June 30, the company reported net income of NT$41.8 billion.
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