E-COMMERCE
PayPal launches IPO
PayPal Holdings Inc was to make its stock debut yesterday with a market value almost 1.4 times that of eBay Inc as investors bet on bigger returns from the digital payments business than its former parent company struggling with slow growth. PayPal started trading yesterday with a market capitalization of about US$46.6 billion, data compiled by Bloomberg show. After the spinoff, eBay’s shrinks to roughly US$34 billion. Investors are viewing PayPal as a new growth option, while eBay’s expansion decelerates amid increasing competition in e-commerce. “Investors have been waiting to invest in PayPal for a long time, even before the split was announced,” said Gil Luria, analyst at Wedbush Securities in Los Angeles. “We’re finally at a point where you can only own PayPal with its market-leading position and growth rate.” PayPal had 169 million users and processed US$1.1 billion in payments in the second quarter.
TELECOMS
Huawei revenue grows 30%
Chinese telecom equipment giant Huawei Technologies Co (華為) yesterday said that revenue surged 30 percent year-on-year in the first half, helped by “solid” sales of smartphones and growth in other business areas. Huawei said that sales reached 175.9 billion yuan (US$28.8 billion) on an unaudited basis in the January-June period. “Huawei’s mid-range and high-end smartphones ... have made solid progress, helping us guarantee quality and sustainable growth in the consumer business,” chief financial officer Meng Wanzhou (孟晚舟) said. Huawei’s group revenue rose 20.6 percent last year from 2013 to 288.2 billion yuan, according to a previous statement. Net profit jumped 32.7 percent year-on-year to 27.9 billion yuan for last year. International Data Corporation (IDC) says Apple Inc was the top smartphone vendor in China during the first quarter of this year with a 14.7 percent market share, followed by China’s Xiaomi Corp (小米) with a 13.7 market share. Huawei was third with 11.4 percent, IDC said.
AUSTRALIA
Banks told to save more
The nation’s biggest lenders will have to set aside more capital against potential losses on home loans, the Australian Prudential Regulation Authority said yesterday in its latest move to bolster the financial system. Under rules coming into force on July 1 next year, the average risk weight on residential mortgage exposures will rise to at least 25 percent from about 16 percent, the banking regulator said in a statement. That will increase the capital requirements of the biggest four banks by about A$12 billion (US$8.9 billion), according to Goldman Sachs Group Inc and Morgan Stanley. “The timing and magnitude of today’s announcement should come as no surprise,” Goldman Sachs analysts Andrew Lyons and Yu Chuan Leong said in a note to investors. “However, the approximately one-year time frame is shorter than we would have expected.”
AVIATION
Rolls-Royce wins contracts
British engineering company Rolls-Royce, under pressure after successive profit warnings, said its aero-engine business won two new contracts totaling US$2.23 billion. Rolls-Royce said that it had been selected by Saudi Arabian airline SAUDIA to provide engine maintenance and servicing for its Trent 700 engines on 20 A330 aircraft under a long-term contract worth US$1.3 billion. The other contract was to supply International AirFinance Corp with Trent 700 engines for 20 of the same jets in a US$930 million deal.
TECH RACE: The Chinese firm showed off its new Mate XT hours after the latest iPhone launch, but its price tag and limited supply could be drawbacks China’s Huawei Technologies Co (華為) yesterday unveiled the world’s first tri-foldable phone, as it seeks to expand its lead in the world’s biggest smartphone market and steal the spotlight from Apple Inc hours after it debuted a new iPhone. The Chinese tech giant showed off its new Mate XT, which users can fold three ways like an accordion screen door, during a launch ceremony in Shenzhen. The Mate XT comes in red and black and has a 10.2-inch display screen. At 3.6mm thick, it is the world’s slimmest foldable smartphone, Huawei said. The company’s Web site showed that it has garnered more than
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
Vanguard International Semiconductor Corp (世界先進) and Episil Technologies Inc (漢磊) yesterday announced plans to jointly build an 8-inch fab to produce silicon carbide (SiC) chips through an equity acquisition deal. SiC chips offer higher efficiency and lower energy loss than pure silicon chips, and they are able to operate at higher temperatures. They have become crucial to the development of electric vehicles, artificial intelligence data centers, green energy storage and industrial devices. Vanguard, a contract chipmaker focused on making power management chips and driver ICs for displays, is to acquire a 13 percent stake in Episil for NT$2.48 billion (US$77.1 million).
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