Shares of Uni-President Enterprises Corp (統一企業) and President Chain Store Corp (PCSC, 統一超商) plunged for a consecutive session yesterday amid investor concerns about lost revenue after the companies sold their stakes in a joint venture operating the Starbucks coffee chain in eastern China.
The two companies last week sold a combined 50 percent stake in President Starbucks Coffee Shanghai Corp (上海統一星巴克) to Starbucks Corp as the US coffee giant brings its operations in China back in-house in its biggest acquisition.
MARKET VALUE
The market value of the companies dropped by NT$49.7 billion (US$1.64 billion) as President Chain Store shares fell from NT$288.50 on Wednesday to NT$256 yesterday, while Uni-President shares slid from NT$60.50 to NT$57.80.
The companies’ annual reports showed that sales and profit contribution from President Starbucks Coffee Shanghai were significantly higher at NT$27.84 billion and NT$4.13 billion respectively last year, compared with Starbucks sales and profit in Taiwan at NT$9.6 billion and NT$770 million.
NEGATIVE IMPACT
In a report published yesterday, Yuanta Securities Investment Consulting Co (元大投顧) analyst Juliette Liu (劉珮昀) said that President Chain Store’s disposal of the Starbucks operations in Shanghai could have a negative effect on the company’s earnings outlook in the long term.
However, the company could use the windfall from the sale to pay out higher dividends and accelerate its convenience store expansion in China’s Shanghai, Suzhou and Zhejiang, which could support its share price in the near term.
Liu cut her recurring profit forecast for President Chain Store by 12.5 percent, or NT$17.3 billion, for next year. She now expects the company’s recurring earnings to fall by 4.8 percent year-on-year next year.
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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