Asia luxury sales fall
Cartier watch maker Richemont SA said sales growth had ground to a halt in the Asia-Pacific region, rekindling fears about a market which has been the driving force of luxury sales in recent years. Shares in the world’s second-biggest luxury goods company fell more than 6 percent yesterday in early trading after it posted a smaller-than-expected rise in fourth-quarter sales. Other luxury stocks, which have been rallying since the start of the year on hopes that demand in China was recovering, were also dragged lower, including world No. 1 luxury firm LVMH Moet Hennessy, Louis Vuitton SA and watchmaker Swatch Group AG. “At this stage, it is unclear how business patterns may develop and how the business in the Asia-Pacific region will evolve in the near future,” Richemont said in a statement.
BASF, Petronas axe venture
BASF AG, the world’s biggest chemicals maker, and Malaysia oil and gas giant Petronas yesterday announced they were terminating plans to set up a specialty chemicals joint venture in Malaysia. The two companies had signed a proposal in March last year to develop, construct and operate production facilities for a host of specialty chemical products in Pengerang. However, “following negotiations, Petronas and BASF concluded that it would be in their mutual interest to terminate the agreement as both parties were unable to come to an agreement on the terms and conditions for the implementation of the proposed venture,” the two said in a joint statement. The statement said that both companies nevertheless remained committed to continuing their existing long-term partnership.
Zelnik mulls Virgin buyout
Patrick Zelnik, the owner of French music label Naive Records, is considering an offer to buy retailer Virgin Megastore France, which is undergoing a court-ordered restructuring, newspaper Les Echos reported yesterday. The news comes as British media are reporting that restructuring specialist Hilco is the front-runner in the battle to save music retailer HMV Group from administration, with music labels and film studios also preparing a rescue package. Zelnik, who co-founded the first books-to-music Virgin Megastore in Paris in 1988 with British entrepreneur Sir Richard Branson’s Virgin Group, told Les Echos he would submit an offer “within two to three weeks.” Zelnik hopes to get backing for his offer from the French authorities, including sovereign wealth fund FSI.
Pearson gives grim outlook
British education and media group Pearson warned it expected tough market conditions to continue this year after weak trading in its key fourth-quarter selling season hit last year’s earnings. The Financial Times newspaper and Penguin books publisher said it now expects to report on Feb. 25 adjusted earnings per share of about ￡0.84 for last year, below the ￡0.849 it had said it expected in October last year, due to restrained government funding on education in developed markets and weak advertising. The result was already expected to be down from the previous year’s earnings of ￡0.865 a share due to the sale last year of its 50 percent stake in the FTSE International market indeces business to the London Stock Exchange, which it said contributed ￡0.22 a share to earnings in 2011. Shares in the group were down 3 percent at ￡1.202 by 9:03am, back to the level they were trading at at the start of the year following a jump last week.
POOR INTERNAL CONTROLS: Insurance Bureau Director-General Shih Chiung-hwa said the company is expected to get back on track while its chairman is suspended The Financial Supervisory Commission (FSC) yesterday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$939,415) for a reckless investment that endangered its solvency, and suspended its chairman Eugene Wu (吳東進) for poor supervision. The penalty is the second-highest in a single case after Nan Shan Life Insurance Co (南山人壽) was fined NT$30 million in September last year and its chairman Du Ying-tzyong (杜英宗) suspended for two years, the commission said. In three rounds of special and regular examinations conducted since last year, the commission found that Shin Kong Life had given too much power to an asset and liability management committee
HEAVY INVESTMENT: Moody’s affirmed the firm’s ‘Aa3’ rating with a ‘stable’ outlook due to its leading position in the industry and ability to match customer requirements Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue this year is expected to increase about 21 percent to NT$1.29 trillion (US$44.01 billion) from NT$1.07 trillion last year, driven by strong demand for advanced 5-nanometer and 7-nanometer chips mainly used in smartphones and high-performance computing devices, a Moody’s Investors Service report on Wednesday said. TSMC’s rate of revenue growth next year is to increase to 7.5 percent, the ratings agency said. The company, which supplies 5-nanometer chips for Apple Inc’s new iPad series, has introduced the advanced chips ahead of its competitors and gained a significant share of the market for the foundry industry’s
Sony Corp has cut its estimated Play Station 5 (PS5) production for this fiscal year by 4 million units, down to about 11 million, following production issues with its custom-designed system-on-chip (SOC) for the new console, people familiar with the matter said. The Tokyo-based electronics giant in July boosted orders with suppliers in anticipation of heightened demand for gaming in the holiday season and beyond, as people spend more time at home due to the COVID-19 pandemic. However, the company has come up against manufacturing issues, such as production yields as low as 50 percent for its SOC, which have cut into
O2O BICYCLE SHOW: The Taiwan Bicycle Show next year is to be online to offline, with forums, audio-visual conferences and livestreaming of the offline events Local bicycle makers expect demand to continue outpacing supply due to orders triggered by the COVID-19 pandemic, with some companies seeing orders back up through next year. “Next year is all full in terms of orders. Our lead time on components is one year,” Giant Manufacturing Co Ltd (巨大機械) chairwoman Bonnie Tu (杜綉珍) told a news conference in Taipei organized by the Taiwan External Trade Development Council (TAITRA) to announce next year’s Taipei Cycle Show. The pandemic has reduced bicycle supplies and increased demand around the world, Robert Wu (吳盈進), chairman of KMC (Kuei Meng) International Inc (桂盟國際), one of the world’s