Thu, Nov 17, 2005 page11

• Analysts give cautious welcome to Sampo's GM

  NEW BLOOD Market watchers agree that Taiwan's No.2 TV-maker needs a new direction, but it remains to be seen whether Afuna Chen is the best man for the job

  • By Jason Tan / STAFF REPORTER
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  Analysts welcomed the appointment of Afuna Chen (陳瑞勳) as general manager at Sampo Corp (聲寶) on Tuesday but said that how well the appointment will serve its restructuring process remains to be seen.

  Shares of Sampo, the nation's No. 2 television maker, were up 0.5 percent, or NT$0.02, on the Taiwan Stock Exchange yesterday to close at NT$4.16.

  "Sampo is on the right track by recruiting a professional with financial and consumer electronics backgrounds," Allan Pu (卜正倫), an analyst with SinoPac Securities Corp (建華證券), told the Taipei Times in a phone interview.

  This new appointment is expected to help the firm turn its poor performance around, as Sampo needs someone with such expertise to give it new direction and restructure the business financially, he added.

  However, he said that Chen's capabilities remain to be seen as the results of his leadership will only become apparent in the next two to three quarters at the earliest.

  Another security firm, Yuanta Core Pacific Capital Management (元大京華投顧), does not think much of Sampo's stock performance and has long since stopped tracking the company.

  Chen is Sampo's first general manager since the position became vacant last Dec. 1.

  The 57-year-old has 18 years of financial expertise and was previously a vice president with Shinkong Financial Holding Co (新光金控). He started his career with Sony Taiwan, where he spent 14 years overseeing production and planning operations.

  According to Helen Chen (陳佩君), an analyst with Polaris Securities Co (寶來證券), Sampo's business has been on a downward trend since the second quarter of last year and has been hurt by the weak performance of its liquid-crystal-display and plasma-display-panel TV business.

  This contract business, which contributes only 6 percent margins compared to 15 percent for traditional electronics products, has impaired overall revenue.

  To survive, Sampo needs to work on logistics and channel deployment, as its supply chain management is not as proactive as other competing IT firms, she added.

  "Sampo has become a passive electronics brand over the past few years. It ought to divert focus from Taiwan to overseas markets for future growth," Pu said.

  The company should continue to find ways to break into overseas markets, including China, North America or Europe. Offering competitively priced branded products in these markets might help to expand revenue sources, he said.

  He added that Sampo's possible partnership with First International Computer Co (大眾電腦) for the European market will be a plus as it needs to trim production costs and utilize domestic resources for LCD and plasma TV production there.

  Sampo is reportedly to announce its latest synergy with First International Computer tomorrow, outsourcing production to the latter's facilities in the Czech Republic.

  "We are aggressively looking for strategic partners to explore European markets for business expansion. But we will not make any comment before signing the final agreement," said Sampo spokesman Michael Chen (陳柏蒼) in a filing with the Taiwan Stock Exchange yesterday.
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