Asian consumer-electronics makers and solar energy businesses will be “hurt the most” among the region’s technology companies by the European debt crisis, JPMorgan Chase & Co said.
Asian consumer technology and solar power companies have high exposure to Europe and a slowdown in demand will hurt their performance, according to a JP Morgan report dated Wednesday.
More than 77 percent of the world’s solar demand last year came from the EU, JP Morgan said, citing European Photovoltaic Industry Association data.
Personal computer, television and handset makers “will be hurt the most in the order of impact,” the report said.
“In terms of potential impact from China’s tightening, it would be handset, TV and PC in the order of impact,” the report said.
Based on JPMorgan’s analysis, South Korean TV brands like Samsung and LG Electronics have high exposure to the EU. The two companies have about 28 percent and 20 percent of total revenue contribution from the region, it said.
As for PC brands, Taiwan’s Asustek (華碩) and Acer (宏碁) receive more than 45 percent of their revenue from the EU, it said.
In addition, “with Asian solar having high exposure to the EU, we would expect any potential decline in European end-demand to have a material impact on Asian solar companies,” the report said.
The MSCI AC Asia-Pacific Information Technology Index sank 2.9 percent to the lowest level since March 25 as of 5:51pm in Tokyo. It posted the biggest decline of 10 industry groups in the MSCI Asia Pacific Index, which dropped 2.4 percent on concern European countries other than Greece will require bailouts.
South Korea’s Samsung Electronics Co, which got 24 percent of its revenue from Europe in the quarter ending December, fell 2.4 percent to 814,000 won (US$713) at the close in Seoul yesterday. Sharp Corp, which makes 7.6 percent of its revenue from solar cells, declined 4.3 percent to ¥1,173 (US$12.50) in Tokyo.
In Taipei trading, Asustek fell by the daily limit to NT$54.2, while Acer edged down 0.85 percent to NT$81.3.
ADDITIONAL REPORTING BY KEVIN CHEN
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