Tue, Aug 31, 2004 - Page 11 News List

China Development forecasts 2004 loss on investments

BLOOMBERG

China Development Financial Holding Corp (中華開發金控) forecast a loss for the full year after reporting an unprofitable first six months on losses on its investments.

China Development officials told press at a briefing in Taipei that the company lost NT$6.3 billion (US$185 million) in the first half after auditing and it expects a NT$4.8 billion loss for the full year. The company said it set aside NT$10.9 billion to cover possible losses on investments.

"The move is to fully reflect our asset quality and enhance overall transparency," Chief Financial Officer Sherie Chiu (邱德馨) told a news conference. "Next year, we hope to return to profitability."

The company had expected to make a net profit of NT$8.3 billion. China Development last month reported an unaudited first-half profit of NT$4.9 billion. The audited first-half loss reported today narrows from a loss of NT$14.7 billion in the year earlier period.

Shares of China Development fell 0.6 percent to NT$16.20 on the TAIEX, before the announcement was made.

The company made NT$1.2 billion of provisions for losses at its fully owned asset management company, with the remaining losses coming from its venture capital investments, Chiu said. The company's flagship China Development Industrial Bank (中華開發銀行) is Taiwan's largest venture capital investment company.

The company has invested in more than 300 local companies, including Taiwan Semiconductor Manufacturing Co (台積電) and United Microelectronics Corp (聯電), Chiu said.

The Koo family, Taiwan's fourth-richest family, according to Forbes magazine, took control of China Development in April after Angelo Koo (辜仲瑩) defeated former chairwoman Diana Chen (陳敏薰) in a boardroom battle.

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