CAL receives stable rating
Taiwan Ratings Corp (中華信評) yesterday affirmed its “twBBB” long-term corporate credit rating and “twA-3” short-term credit rating on China Airlines (CAL, 華航) with a stable outlook.
The rating affirmation reflects the agency’s expectations that CAL’s profitability and cash-flow generation would recover because of sharply falling oil prices, its cost-cutting efforts and the increasing number of cross-strait flights, Taiwan Ratings said in a statement yesterday.
This, together with limited capital expenditure, will enable CAL to reduce its leverage and generate cash flow protection measures commensurate with the ratings over the next two years, it said.
The carrier’s bottom line is likely to turn positive in the fourth quarter of this year, following huge operating losses of NT$7.3 billion (US$218.7 million) in the first half and anticipated further losses last quarter. The oil price has plunged to below US$80 per barrel this month from more than US$140 per barrel in July, Taiwan Ratings said.
CAL will also be the major beneficiary of increasing direct flights across the Strait thanks to its position as the nation’s largest airline. The carrier enjoys better margins in these routes because of the absence of competition from leading international airlines.
However, the benefit will become significant only after a substantial frequency increase from its current eight flights per week, which is still subject to political negotiations.
CAL also faces challenges to generate a satisfactory return on capital over the next two years because of a likely global economic slowdown and competition in Taiwan’s overcrowded aviation market, Taiwan Ratings said.
Loans to brokers may be raised
The central bank yesterday unveiled a proposal to relax the ceiling on loans that domestic banks can extend to securities brokerage firms to boost the liquidity in the securities sector.
The bank said in a statement that the proposed revision would allow banks to loan out 3.5 times the net worth of the securities firm applying for a loan — up from the current 2.5 times net worth.
Any opposition to the proposal should be reported to the central bank by next Tuesday before the bank starts reviewing arguments on the revision, the statement said.
China Dev. to buy back shares
Taiwan’s largest venture-capital company, China Development Financial Holding Corp (開發金), plans to buy back about 4.66 percent of its own shares.
China Development plans to buy 523 million shares, setting the price at NT$3.82-NT$12.29, from today through Dec. 26, the Taipei-based company said in a Taiwan Stock Exchange filing yesterday.
The stock plunged by the daily 7 percent limit to NT$5.45 yesterday.
Gamania’s net profits fall
Local game provider Gamania Digital Entertainment Co (遊戲橘子) yesterday reported that net profits in the first three quarters of the year fell 24.2 percent year-on-year to NT$248 million (US$7.63 million), or NT$1.62 per share.
Revenues during the same period were up 8.3 percent year-on-year to NT$2.85 billion, the company said in a statement.
Gamania attributed its sales growth to new products and two self-developed games, which were very popular in Japan.
The company’s subsidiaries in Hong Kong and Japan saw record 52 percent and 45 percent year-on-year growth in sales respectively for the first nine months.
The increase in costs allocated for employee bonuses and the expansion into southern Asian markets, however, cut into its net earnings.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day