patron's day photos...

some belated photos of mr president...


...and dr richard hu. =)


oh...i emceed the event. =)

DMX: Venture a merger?

This article's return on investment:
- 3G in China is going to be huge
- DMX will be spending S$5 million this year
- Merger with Venture Corporation possible

"I guess we are wanted."

As DMX Technologies await shareholders to approve Venture Corporation's plan to take a 22 percent stake in DMX, CEO Giang Phung is working out how to use the S$70 million they'll receive.

That shouldn't be too difficult, especially given its focus on the Chinese market.

DMX goes 3G

The introduction of third generation mobile telephony in China is a great opportunity for DMX.

Licenses haven't been issued yet, but mobile operators are already conducting software trials.

"We have some information from reputable sources like China Consulting Group that by 2008, there will be about 170 to 200 million 3G users in China," says Phung.

He adds China is ready to issue 3G licenses soon, and hopes to get some contracts in that arena.

Capex

DMX is also planning to head into India, Thailand and Vietnam. That means they'll be spending a little more money this year.

"We are allocating about S$5 million for the total group," says Phung.

"In terms of setting up an office and entering into a country, it would cost you about a million dollars."

Capital expenditure shouldn't pose a problem to DMX, if they have fresh cash from the Venture acquisition.

Merger with Venture?

So how about a merger with Venture?

Phung thinks "anything is possible."

Without elaborating on future plans between DMX and Venture, he believes companies that deal with communication and technology should work closely together to build on their knowledge.

"We take the opportunity, we measure it, we see the benefits and we go and do," says Phung, "So we're very open to Venture."

King of the HDD makers

This article's return on investment:
- Seagate-Maxtor will control almost half of the global hard disk drive market
- Merger will speed up industry consolidation
- Suppliers to Seagate-Maxtor will have to lower their prices
- Flash memory remains close competition for hard disk drives

Singapore-listed suppliers to computer hard disk drive (HDD) makers are going to be under even more pressure, now that Seagate and Maxtor have joined forces.

They will own almost half of the global hard disk drive market after completing their merger in the third quarter of this year.

Smaller hard disk players such as Hitachi, Samsung and Toshiba are also feeling the heat.

And Kaufman Brothers has downgraded US-based Western Digital and warned that a major price war is brewing.

SIAS Research analyst, Alfie Yeo, tells Investor Central's The Insider how this could change the hard disk drive industry in Singapore.

And the situation is unlikely to get better soon, given that more consolidation is expected.

Seagate is taking an 84% stake in Maxtor for US$1.9 billion.

Together, they will become the world's largest hard disk drive maker worth US$10 billion.

"We think that in terms commanding the direction of prices, Seagate-Maxtor would be in a leadership position," says Yeo.

Seagate-Maxtor: More consolidation to come

The hard disk drive industry seems to see one acquisition every five years.

Seagate acquired Conner Peripherals in 1996 and Maxtor acquired Quantum's hard disk drive business in 2000.

Yeo says this deal between Seagate and Maxtor should "accelerate the M&A cycle."

"We believe that the next round of merger and acquisitions would probably be Seagate-Maxtor taking over Western Digital."

He adds Korean or Japanese players are unlikely to be the targets for cultural reasons.

Implications for local stocks

Some locally-listed counters supply to Seagate and Maxtor.

So when news of the merger broke, investors wondered how stocks like Brilliant Manufacturing, Jurong Technologies or Unisteel Technologies would fare.

These companies supply parts to Maxtor and all three risk losing their business once the acquisition is effective.

"In terms of cost down, the impact of it would be much greater among the Singapore players," says Yeo.

He cites Brilliant as being in the most precarious position because Maxtor sales make up at least 80% of its revenue.

Jurong Tech's hard disk drive segment takes up only 20% of its revenue.

Its other major customer is Motorola.

The most resilient of the three seems to be Unisteel, since it has diversified its business and only supplies low cost parts in small amounts to Maxtor.

Unisteel also supplies to Seagate.

In contrast, the winners would be those who sell to Seagate like Magnecomp, MMI and Seksun.

Seagate sales make up a big part of their overall business.

Outlook

There are changes in business trends to which even the beefed-up operations of Seagate will not be immune.

The biggest threat to the hard disk drive industry as a whole is flash memory.

It is based on semiconductor technology and is faster, weighs less and requires less power than traditional hard disks.

Financial website www.thestreet.com quotes Korean flash memory maker Samsung as saying that flash might even find a place in PCs.

That may well be true, given that industry watchers expect flash to hit up to 20 GB in memory space.

But Seagate CEO, Bill Watkins, says he does not see any interest in flash in the PC world.

He says "the two storage media are complementary and are likely to grow rapidly."

"The companies that know the most about flash are investing the most in hard drives."

So we may not see a loser from this. At least for a while.

It is little wonder that professional journalists are increasingly publishing their work on their personal weblogs than in the media for which they work. Most journalists take pride in their reports and have the interests of their audiences - in preference to those of their interview subjects - at heart. They are credited for their work with bylines - the tags below stories to identify the author.

Along with credit for a story, bylines also apportion responsibility and hold journalists accountable for their articles and the impact they have on the audience and on the people and companies they feature. This is an important tool to ensure fairness and objectivity. Journalists cannot hide and make allegations under the cover of anonymity.

But while journalists were content with the credit and responsibility bylines bring with them, they can be more trouble than they are worth. There are pros and cons for journalists in having them.

Pros:

1. Readers recognise you for your work.
2. Before long you will develop a following among readers who track your articles.
3. You become a trusted source for honest stories, and in time, your word might just become gospel.

Cons:

1. Investor relations or corporate communications personnel recognise you for your work.
2. They will also track your articles.
3. And you become a trusted source for disruptive stories, and in time, your word might just keep you off their invite lists.

Being targeted like this is one reason for the rise in the number of online journals, more commonly known as weblogs, or blogs for short. Bloggers - people who keep these journals - do not mince their words because they are not accountable to an editor or an employer. And they do not need to write anonymously to produce valuable, well-researched commentary. On the contrary. Writing anonymously draws their credibility into question. But their independence alone provides freedom which they would not enjoy working for a media organisation.

Likewise, sources are often more comfortable conveying information to an independent writer than a journalist with a media organisation. And that is how The Insider received a lead that we are pursuing in the next edition.

How did we get this lead?

Well, we blogged and you responded.

Our source for this story replied to our log about the company, suggesting we dig deeper.

So subscribing to the popular saying “where there's smoke, there’s fire,” I am about to find out what this person knows that I don’t.

Watch for my byline.

Death By Association

The odds were against Pine Agritech, even before it listed.

Return on Investment:

- Association with People’s Food may weigh on sentiment
- Pine Agritech aims to be a major global player in the medium to long term
- Europe might be its next stop

You know things aren’t looking too good when investors are hesitant about subscribing to your shares.

In addition to contending with the slew of impending IPOs fighting for investors’ attention, newly-listed Pine Agritech has another problem on its hands: it seems that potential investors are avoiding the stock, purely because its major shareholder is People’s Food.

Retail investors aren’t too crazy about People’s Food because they don’t think the company is transparent enough.

The soybean producer seems confident of standing on its own though, as company spokesman David Tsoi tells phoneCAST?.

"We are already one of the biggest in China, with an internal estimate of about 40% market share.

"We aim to increase that to within 40 and 50 percent in the next five to ten years."

Tsoi says that target would put Pine Agritech among the major players globally.

But with no fixed long-term customers and orders, what makes him so sure his clients wouldn’t just run off to a cheaper alternative producer?

That’s because their core product of soy protein isolate (SPI) - widely used in food products like coffee creamer, infant formula, sausages and patties - "isn’t a homogeneous product, that people can just get anywhere."

"We work with our customers to customise the product for them," explains Tsoi.

"So it will not be that easy for them to find a substitute for this, since they won’t want to risk their products tasting different."

SPI has no colour, smell or taste but aids in the overall flavouring of the food it is added to.

It is the product of soybean oil, which Pine Agritech extracts from the soybeans it buys.

The company purchases up to 80% of its annual needs during harvest months, so it usually has enough stock to last it through the rest of the year.

Tsoi adds that sales for the whole year are "fairly consistent."

But things could change once Pine Agritech heads into Europe, although they don’t have any concrete plans for that now.

"Currently, all our sales are in China because demand is big enough, but we have interested parties in Europe enquiring about our products," says Tsoi.

He thinks since the European Union (EU) is getting increasingly concerned about the effects of genetically modified food, his products - which come from non-genetically modified soybeans - have the potential to be brought there relatively easily.

Pine Agritech thinks its main challenge now is to "maintain the quality of our products."

Other than that, Tsoi doesn’t see any other causes for concern.

The group will be paying out a dividend of no less than 20% of its profit after tax for the year 2005-2006.TI

An Apple A Day Keeps Creative Away

But Creative is still bent on ripping the core out of Apple.

This article's Return on Investment:

- Creative faces fears at home that it’s biting off more than it can chew
- But US analysts worry it will be Apple to come off second best
- Analysts get ready for “softness” in music player market

Openly pitting yourself against the market leader hardly leaves any room for failure.

And while Creative Technology did not “fail”, it’s still some distance away from its marketshare target of selling 40% of the world’s digital music players.

Since declaring an MP3-player war on Apple’s iPod, Creative has managed to double its market share.

But Apple still dominates, with about 70% of the market.

SIAS Research analyst Alfie Yeo tells phoneCAST Creative has achieved the objective of its marketing campaign, “but results aren’t up to what the market expects them to be, so they got a beating from investors.”

The company admits gross margins have been squashed because they’ve slashed prices to compete with Apple’s price cuts for its iPod and iPod Mini.

Creative’s high marketing expenses have also been weighing on its margins.

What’s more, Chief Executive Sim Wong Hoo saying he will continue his aggressive marketing campaign and rise to the challenges of competitive pricing.

He believes he will make more money in the longer term if he perseveres and improves his market position.

But local analysts are skeptical that Creative has the marketing muscle to take on the big boys in Apple and other consumer electronics players, although Yeo says he has to “give it to Creative for their guts.”


Creative's Zen Micro

For the three months ending December last year, Creative sold two million units - close to half of Apple’s sale of 4.5 million players.

That’s shortly after they started to compete seriously for the MP3-player pie.

“What’s unfortunate is its price war with Apple because Apple can afford to lower margins but not Creative,” Yeo says.

Ironically, analysts on the other side of the globe are looking at Apple in the same way Yeo is looking at Creative.

They think Asian device-makers are giving Apple a run for its money, coming up with newer and cheaper alternatives to the iPod.


Apple's iPod Mini

Investors are concerned that once iPod sales slow, Steve Job’s baby might become yesterday’s news.

Unless, of course, it manages to find something else to keep its name up in the ranks of consumer electronics.

Their fears aren’t unfounded.

For starters, digital music players will soon have to contend with the likes of Sony’s Playstation Portable - a video game device that plays music and movies as well.

Because of such technological advances, industry-watchers can only see MP3 players getting cheaper.

The only way makers can still stay profitable in this is through sheer volume sales or cutting down on operating expenses.

Secondly, related businesses are guiding downward as they anticipate “softness” in the music player market.

One such company is Nasdaq-listed Synaptics - which provides the click-wheel interface for the hard-drive based iPod.

Such worries are now keeping investors at bay.

As prices continue to fall and MP3 players become an increasingly mass-consumption product, makers are hard-pressed to come up with new gadgets to please the public, and investors.

In that sense, Creative seems to have the upper hand because it has been introducing a whole plethora of computer peripherals and products since its Zen Touch.

Apple, on the other hand, would count the iPod as its first real foray into the consumer electronics arena.

And that, for a specialty computer-maker like Apple, is a whole new ballgame.

OSIM Flexes Its Muscles

And risks straining them.

This article’s Return On Investment:

- Latest deals may be over-stretching OSIM
- Brookstone in Asia
- OSIM to spend S$10-12 million this year


OSIM Lifestyle Store at Raffles City Shopping Center

Adding two big names to its stable sure looks good on paper but analysts warn OSIM had better watch its intake.

It may be on the brink of a burnout.

Here is OSIM’s workout regimen for the year:

1.Finalise the Brookstone deal
2.Bring Brookstone into Singapore and Hong Kong
3.Finalise the Global Active (GA) acquisition
4.Help GA restructure its newly-acquired Australian operations
5.Restructure China operations and turn them into subsidiaries


CFO Peter Lee is happy to explain Brookstone

With so much on his plate, it is no wonder why Chief Financial Officer Peter Lee’s family “doesn’t get to see much of me, even when I’m in town.”

Frequent flying aside, Lee must also work his figures to bring down debt, after borrowing to pay for Nasdaq-listed Brookstone.

“We are taking a five-year loan for the acquisition but we are targetting to pay down faster than that because we have strong cash flow,” Lee tells phoneCAST.

In spite of such assurances, analysts worry the convergence of these deals are placing pressure on management.

OSIM has already appointed several of its directors to the board of Osim Brookstone Holdings LP.

It is also helping GA to restructure its Australian chain.

In addition to those, Lee says they are in the midst of turning their China operations into subsidiaries.


Geezers enjoying the OSIM iDesire

So is OSIM overworking those muscles?

Lee doesn’t think so.

He says he doesn’t have to manage Brookstone’s operations because Brookstone’s existing executives are doing that.

For now, at least.

“The current CEO (Michael Anthony) will continue as chief and will manage the Brookstone business going forward,” says Lee, “together with current management team members.”

Of course, things will be different when Brookstone comes to Asia.

Lee says Brookstone could arrive in Singapore and Hong Kong as early as the end of this year.

On the positive side, GA and Brookstone have collectively boosted OSIM’s presence to over 900 stores worldwide.

According to Lee, that’s just a small step away from hitting his target of 1,000 stores by 2008.

That doesn’t seem like a bad deal, considering how OSIM intends to maintain its annual reinvestment in the business of S$10-12 million.

Investors will keep their fingers crossed they haven’t bitten off more than they can chew.

Informatics

From the analysts/shareholders' meeting, Informatics still seems very unsure of their business strategies and current situation. They seem to be waiting for Michael Teng to get into his role and develop some new strategies.

Saturday's BT: Berjaya bought up 23 plus percent of Informatics...that justifies the 35 percent rise in share price wed/thurs?

After the EGM 9th July, Oei Hong Leong will hold the biggest stake in Informatics, Berjaya coming in a close second, and Wong Tai's stake will be whittled down to 19 plus percent.

Now what is Berjaya's role in all of this?

Why would they be challenging OHL's stake? Are they planning a takeover?

Brokers were thinking perhaps OHL would buy over Informatics, but did they anticipate Berjaya to come by and sweep up those shares?

Would brokers now think that Berjaya is intending to take over the company?

If it's a takeover, in what sense? Privatise it?

Broker says:

My dad and I were talking about it on the way home Friday. I told him all about the analysts briefing, and he quipped that OHL probably wouldn't buy into Informatics whole.

He thinks OHL's too big a player to consider a small outfit like Informatics. He thinks OHL is just buying into the company to sell out when the price is right.

Key ideas:

1)Berjaya ? actually thinking of taking over? Or same agenda as OHL, whatever that is...?
2)OHL ? really just a bored businessman wanting to make a quick buck outta Informatics?
3)Informatics ? what are they still hiding?

Informatics Analyst Briefing

11am. 2nd July 2004. OUB.

Muahahahahahaha.....

Fresh in from the rumor mill...

So Informatics is most active today. And you think that's strange.

What's even stranger is that it's up 11.5 cents (35.9%), all the way to 43.5 cents, despite reporting (on Wednesday) a full year loss of...get this: more than double the amount disclosed by the company earlier! So it's losses are now a hefty 42.5 million!

What is up?!

"There is talk that Indonesian-born businessman Oei Hong Leong has bought Informatics, after several traders said local brokerage GK Goh, Oei's adviser during an earlier takeover in 2003, was among Thursday's buyers."

Dow Jones.

Hmm...and the plot thickens...*evil grin*

Why are people saying Oei Hong Leong has "bought Informatics"? Sure...he holds a majority stake, but he's a savvy investor who sticks his hand in everything he deems "worthy".

But according to a dealer at OCBC Securities, there's talk that he's just broken into the Chinese market for Informatics. In other words, he's helped them create inroads.

So it could really be this, coupled with GK Goh's buying into the stock, that's making people sit up and listen.

The situation now's pretty much like when Oei Hong Leong's name first came up in the whole Informatics game. So, accounting scandals aside, it seems like everytime the guy's name appears in connection with the computer school, the stock just shoots up!

So...hmm...several questions i need answers to here...:

1) what's the main driver of the rise in the stock price?

2) is oei hong leong's reputation so great that it could even pull people's attention away from EY's retraction of statement clearing senior management of wrongdoing, PwC's recent finds, the CAD's ongoing investigations and it's huge losses (though that could've been factored into the stock's earlier losses because of the PwC report already?)???

3) has the guy actually bought into Informatics? in an interview with terence several weeks ago, he thought that it could be a possibility in the future, but still a highly unlikely possibility.

4) Informatics has been trying to get more Chinese students on board...and oei hong leong's supposed to have made a major breakthrough for them in China...hmm...fact? documentation? announcements?

Dang...this is all too exciting for me. I wonder if I'd be able to sleep tonight...;)

i must've been away from hip hop for way too long.

it took me twice as long as i used to, to get into the groove and perform all the steps...and still, i was shakey. dang.

that's the price i gotta pay for being away from the gym for too long. it sure felt good treadmilling for 20 mins, then going to suhaimi's hip hop class. from today, i'll try to make every of suhaimi's saturday hip hop sessions...the guy's da bomb! i bet my legs and butt are so gotta ache in the morning.

got a call from wayang warehouse this morning...they're the guys staging this musical called College Girls. i've been shortlisted for a role and have to head down for an audition this wednesday evening.

so that makes two auditions for wednesday itself. what's up with that man? think i may have to dump the mediacorp one at 3pm...

aunt's back home from the hospital today. i've often wondered what she's thinking and how she feels, deep down. she had breast cancer many years ago. now, the evil cells are back and are attacking her everywhere else. she knows she's dying. everyone knows she's dying. she's now just going through each day, waiting for her body to exhaust of the various types of chemo drugs.

here's a wonderful, giving woman...and it's just sad that she's gotta go through this shit all over again.

the next time you see me online or in person, try saying this to me:

buenos dias serene! que tal?