Laptop computer maker Compal Electronics Inc (仁寶) yesterday said it plans to spend NT$3.09 billion (US$102.4 million) to subscribe to 2.15 percent of new shares of a subsidiary of Leshi Internet Information and Technology (LeEco, 樂視), to enhance its strategic partnership with the Chinese firm.
“We believe the strategic investment will benefit both Compal and LeEco in the long term,” Compal president Ray Chen (陳瑞聰) told an investors’ conference at the company’s headquarters in Taipei.
The investment is to expand the two firms’ collaboration from the smartphone business to the Internet of Things and virtual-reality sectors in the long term, Chen said, adding that it would be conducted through a Compal subsidiary in Kunshan, China.
The transaction is expected to be completed before June 21, Compal said.
Chen’s remarks came as Compal reported net income for last year of NT$8.13 billion, or earnings per share of NT$1.88, a drop of 6 percent from NT$8.68 billion, or earnings per share of NT$2.01, in 2015.
Compal, which is LeEco’s largest smartphone assembler, last quarter booked NT$695 million in bad debt, compared with NT$360 million in bad debt in the prior quarter — because of LeEco.
As of Sept. 30 last year, the Chinese company owed Compal NT$8.29 billion in account receivables, a filing with the Taiwan Stock Exchange on Nov. 23 last year showed.
LeEco has been paying its debts regularly since November and has returned nearly 50 percent of the total to Compal, Chen said, without disclosing updated figures.
Compal does not expect to book any more bad debt from LeEco this quarter, due to the Chinese firm’s regular repayments, Chen said.
“LeEco is an important smartphone client for Compal. We believe it will overcome its financial troubles,” he added.
However, as LeEco is expected to turn conservative on its smartphone business this year amid its financial issues, Chen said he expects Compal’s smartphone shipments this year to be flattish or slightly decline from last year.
Compal’s total device shipments this year are expected to grow by 10 percent annually to 87 million units, driven by shipments of notebook computers, tablets and smartwatches, he said.
Shipments of notebooks and tablets are this year forecast to grow by 10 percent and 20 percent respectively, supported by increasing order allocations from existing clients, he added.
Compal is assessing the feasibility of selling its stake in Lienpal Ltd (聯寶) — a contract notebook joint venture with China’s Lenovo Group Ltd (聯想) — to Lenovo after the contract expires in October, Chen said.
“We are still evaluating the pros and cons of selling Lienpal. A decision will be made when the contract ends later this year,” Chen said.
UNCONVINCING: The US Congress questioned whether the company’s Chinese owners pose a national security risk and how the app might influence young users TikTok chief executive officer Shou Chew (周受資), confronted with an unforgiving, distrustful US Congress, tried to give answers in his testimony on Thursday that avoided offending either the US government or China. However, his evasiveness left Congress unsatisfied, with representatives hungrier than ever to punish TikTok for ties to its parent company ByteDance Ltd (字節跳動), based in Beijing. He did not bring his company any closer to a resolution. Politically, TikTok is in a tougher spot. Its executives had been discussing divesting from ByteDance to resolve US national security concerns, people familiar with the matter told Bloomberg. However, China this week said
Sanofi SA’s drug Dupixent succeeded in a late-stage trial for chronic obstructive pulmonary disease (COPD), raising the odds that the blockbuster would be the first biologic medicine cleared to treat the lung disorder. Dupixent, which is already prescribed for asthma and some skin conditions, showed a 30 percent reduction in the rate at which patients’ COPD worsened compared with those who received a placebo during the stage-three Boreas trial, the company said in a statement yesterday. The positive data could herald a new era of cutting-edge treatments for the life-threatening respiratory affliction and provide another major boost in demand for the French
SEMICONDUCTOR EQUIPMENT: The international trade group said the sector would recover from a slump, with spending expected to rise 4.2 percent to US$24.9 billion Taiwan is to retain its position as the top spender on semiconductor front-end equipment and facilities next year, with spending expected to increase 4.2 percent year-on-year to US$24.9 billion, international trade group SEMI said yesterday. The spending forecast matches an expected recovery in global semiconductor equipment and facilities investment next year, it said. International equipment spending is to return to growth next year, SEMI said in a report, forecasting 21 percent growth to US$92 billion. The expansion would manly be driven by robust demand for semiconductors in the automotive and high-performance computing segments, the association said. “This quarter’s SEMI World Fab Forecast update
Taiwan’s semiconductor industry faces multiple challenges, from the need to conduct further research into forward-looking technologies to a shortage of talent, an industry executive said on Wednesday. Advancing forward-looking semiconductor research and nurturing talent require long-term joint efforts by the industry, government and academia, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) corporate research director Marvin Chang (張孟凡) said. Chang outlined the challenges in a speech at a semiconductor forum organized by the National Science and Technology Council (NTSC) in Hsinchu. Noting that manufacturers have been deploying fin field-effect transistor (FinFET) technology for more than a decade to develop advanced microprocessors, Chang said nanosheet is
RSS