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Author: Mei Ling Tan

  • Government to invest $345 million to bail out Vietnam Airlines

    Government to invest $345 million to bail out Vietnam Airlines

    The State Capital Investment Corporation said it is in discussions with Vietnam Airlines to invest VND8 trillion ($345.49 million) in the carrier through a rights issue.

    It follows a government resolution to resolve the difficulties faced by the airline due to the impact of the Covid-19 pandemic, Nguyen Chi Thanh, general director of the sovereign fund, said at a press conference late last week.

    The resolution requires the State Bank of Vietnam to reimburse loans of up to VND4 trillion to credit institutions that have lent to Vietnam Airlines and allow the carrier to make rights issues to existing shareholders to supplement its capital.

    Thanh said: “Vietnam Airlines will issue shares worth VND8 trillion to existing shareholders, accounting for 25 percent of the carrier’s charter capital. SCIC, acting on behalf of the Government, plans to buy these shares.”

    The government-owned 86.16 percent in Vietnam Airlines on December 31, 2019.

    Thanh said the airline is making plans for a rights issue, and SCIC’s task is to determine a reasonable issue price close to the market price and is working with Vietnam Airlines on this.

    “In order to do that, Vietnam Airlines must be valued, and this requires at least a five-year business plan if we use the discounted cash flow method.”

    The SCIC would appoint a “globally reputed auditing company,” and the latter would identify the most appropriate valuation method possibly within a month, he said.

    Vietnam Airlines expects losses of VND12 trillion for 2020 compared to a VND3.37 trillion profit in 2019.

    It presently flies an average of 300 flights a day on more than 60 domestic routes. It has resumed flights to Japan, though not from that country, and plans to resume flights soon to mainland China, Taiwan, Laos, and Cambodia.

    In November, the National Assembly approved a bailout that could see the carrier get VND12 trillion and allows it to sell more shares to existing shareholders to boost cash reserves.

  • Foxconn unit receives business license for $270 mln Vietnam plant

    Foxconn unit receives business license for $270 mln Vietnam plant

    The FuKang Technology Company, a Foxconn unit, received a business license Monday to build a plant to produce laptops and tablets in northern Vietnam.

    The plant will be located in the Quang Chau Industrial Park in the northern province of Bac Giang and will annually produce eight million units, the government said in a statement on its website.

    The Taiwanese electronics contract manufacturer has so far invested $1.5 billion in Vietnam and created jobs for more than 35,000 workers and the company, formally known as the Hon Hai Precision Industry Co., plans to raise its investment by $700 million and recruit 10,000 more local workers this year, the government said.

    Last week Foxconn was also looking into investing $1.3 billion in Thanh Hoa Province, 160 km south of Hanoi.

    Last year, the company produced the first batch of display screens at its $26-million factory in the northern Quang Ninh Province.

    Foxconn, a major assembler of Apple products, including the iPhone, and the world’s largest contract manufacturer, came to Vietnam in 2007, and has been operating mainly in the northern provinces of Bac Ninh, Bac Giang and Vinh Phuc, making computers and other electronic products and car parts.

    It has said that Vietnam is its largest manufacturing hub in Southeast Asia.

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  • Mitsubishi Vietnam recalls over 9,000 cars to replace fuel pumps

    Mitsubishi Vietnam recalls over 9,000 cars to replace fuel pumps

    Mitsubishi Motors Vietnam is recalling 9,066 Outlander and Xpander cars to fix a fuel pump issue that could cause the vehicle to stall.

    They include 5,370 Outlanders manufactured in Vietnam between January 15, 2018, and July 21, 2019, and 3,696 Xpanders imported from Indonesia and assembled between August 21, 2018, and September 20, 2019.

    The company said the inflated impeller inside of the pump “might have caused it to touch the surrounding parts of the pump body and stop the pump from spinning” which could result in “the engine not starting or stalling.”

    Car owners can take their vehicles to an authorized dealership for a free fuel pump replacement which will take around one hour.

    Mitsubishi uses gas pumps supplied by Japanese company Denso, which caused similar problems in many other cars including Toyota and Honda.

    But it said this error would not occur in its other cars.

    According to data from the Vietnam Automobile Manufacturers Association, auto sales fell 8 percent in 2020 to 296,634 units.

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  • HSBC Advocates for More Asian Say in Climate Change

    HSBC Advocates for More Asian Say in Climate Change

    HSBC chairman Mark Tucker lauded the efforts of global governments in creating standards and definitions for sustainability but expressed concerns that they could potentially leave out Asian economies.

    According to Tucker, Asia is increasingly where global leadership is coming from» with regards to sustainability, citing China and Japan’s rise to drive global agendas in the recent G20 forum alongside the greening of Hong Kong and Singapore’s financial markets.

    Asia is arguably where the fight against climate change will be won or lost, he said during a virtual session at this year’s Asian Financial Forum (AFF).

    Although Tucker applauded industry efforts to set standards in the fight against climate change, he underlined his concerns that this could occur at the expense of capital flows for Asian emerging economies.

    Setting international standards and definitions for sustainability is essential to making progress and the EU has done very good work on this,» he said. «But there’s a danger that these standards may not drive investments into the emerging markets in Asia where it’s needed most for sustainable infrastructure.

    He also underlined this year’s Scotland-based COP26 (United Nations Climate Change Conference) conference as a key moment to lock in the ambitious, low carbon policy goals, adding that Asian economies need to play a big part in those discussions» on issues such as establishing carbon prices.

    Tucker expressed greater optimism in the global fight against climate change, highlighting better prospects without the Donald Trump administration.

    If you look at the three economic blocks – U.S., China, E.U. – there’s plenty they don’t find agreement on, he explained. But I think where they are absolutely united today is their commitment, certainly under the new U.S. administration, to tackle climate change.

    Last October, we announced a new commitment to reset our ambitions, which were significant in the first place, but to reset them to a higher level, Tucker said, reiterating the bank’s goal to achieve net-zero carbon emission across its business by 2050.

    Aligning our own emissions and those of our portfolios and customers to the Paris Agreement goals. This is not insignificant when you think of this: our portfolio is largely Asian based and other banks are clearly in much more established marketplaces.

    The bank has committed up to $1 trillion of financing for this transition over the next ten years though it has yet to share details about its exact strategy.

    On HSBC’s business plans, Tucker said that with interest rates expected to stay low and an ongoing pandemic, the bank has changed its plans to further accelerate growth.

    He highlighted South Asia and, in particular, wealth management opportunities in China’s Greater Bay Area. He separately noted that HSBC was not looking into emerging non-traditional areas of finance like cryptocurrencies, despite related moves by competitors like Standard Chartered’s inroad into crypto custody or DBS’s recent launch of a digital exchange.

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  • Skoda Auto Opens New Manufacturing Facility For Test Vehicles & Prototypes At Mlada Boleslav Site

    Skoda Auto Opens New Manufacturing Facility For Test Vehicles & Prototypes At Mlada Boleslav Site

    The technical department of Skoda Auto recently opened a new facility to manufacture test vehicles and prototypes at its Mlada Boleslav site. This new facility will ensure the development of these vehicles under one roof. The carmaker uses state-of-the-art technologies, such as robot stations and virtual reality solutions, throughout the entire production process. The Czech automaker produced some of the test vehicles for the all-electric ENYAQ iV at the new facility. The entire warehousing is incorporated into vehicle manufacture results in further savings, reducing logistics costs by more than 150,000 euros annually.

    Johannes Neft, Skoda Auto Board Member for Technical Development said, “The use of test cars allows us to draw conclusions about numerous technical parameters at an early stage of development and make the necessary adjustments long before serial production of a new model commences. We are now taking the next step. In the future, we will build 300 test vehicles and 120 prototypes per year with maximum efficiency under one roof in our new, state-of-the-art facility at the Mlada Boleslav site. We have created the ideal conditions here to develop vehicles at the highest level and that will shape the future of our brand.”

    David Vanek, Head of Model and Prototype Manufacture said, “Our new facility has three floors and houses the parts warehouse, body shop, final assembly, and paint shop, all within the smallest of footprints ensuring short distances. At the same time, the facility’s high degree of automation allows for more agile processes and a significant increase in production capacity for test vehicles and prototypes. Furthermore, the building features state-of-the-art virtual reality technologies as well as 168 workplaces in open-space offices and 13 meeting rooms. A large part of the complex 14,000 square meter is used for vehicle manufacture.”

    The ground floor at the center accommodates parts warehouse that includes a covered yard for unloading trucks. While car bodies are manufactured on the second floor, the third floor contains a paint shop and final assembly. The material is transported between floors through a freight elevator. Moreover, the proportion of automation in the body shop has increased to 45 percent from 15 percent because of two robot stations. The production capacity is now doubled to ten car bodies per week while requiring 20 percent less space.

    Additionally, weight-saving designs can be developed at the center as the carmaker has expanded its body shop to include an innovation center for testing joining techniques. It includes clinching, riveting, flow drill screw (FDS) fastening, laser welding, and composite construction.

    Workstations at the facility can be preconfigured and customized with the help of virtual reality technologies, and state-of-the-art IT systems are used in logistics. Quality control will be integrated into the production process and run parallel to the respective manufacturing steps. From an ecological point-of-view, the production facility for the new model and prototype models is very advanced. The short distances save around 1,800-litre of fuel per year, enabling a decrease in CO2 emissions of roughly five tonnes.

  • Ministry wants social networks used to sell goods treated as online marketplaces

    Ministry wants social networks used to sell goods treated as online marketplaces

    Social networks that enable trading of goods should be regulated like e-commerce trading platforms, a draft decree by the Ministry of Industry and Trade proposes.

    It seeks to expand the scope of online marketplace regulations to include social media that allows people to create pages to sell goods, enter into contracts with customers or post articles offering goods or services for sale.

    But Nguyen Quang Dong, director of the Institute for Policy Studies and Media Development, said there is no basis to treat social networks as e-commerce platforms.

    They do not have physical stores or goods, or an obligation to provide support in cases of complaints or fraud, and charge fees for advertising as opposed to sales, he pointed out.

    “Viewing social networks as e-commerce trading sites would be incorrect, they are closer to advertising services. It is necessary to clarify the nature of social networks, instead of trying to have overarching regulations governing everything.”

    Some European countries treat social networks as digital services, a concept with a wider scope than e-commerce platforms, and allows them to collect taxes based on this definition, he added.

    Another provision in this draft that raises concern among analysts is that only foreign investors considered by the ministry to be “reputable global technology companies in the field of e-commerce” will be allowed to enter the Vietnamese e-commerce market.

    It will periodically publish a list of eligible companies, according to the draft decree.

    Nguyen Thanh Ha, chairman of law firm SB Law, warned this would limit the entry of foreign capital.

    “The definition of ‘reputable global tech company’ is ambiguous and subjective, and it is difficult to identify the standards of that qualify a company, and makes it difficult for businesses to interpret.”

    Dong too said this provision is not feasible and should be deleted.

    Global data firm Statista estimated Vietnam’s e-commerce market to be worth $6 billion last year and projected it to grow to around $9 billion by 2025.

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  • Renault & Lotus Team To Electrify Alpine Brand

    Renault & Lotus Team To Electrify Alpine Brand

    The Alpine brand is already being re-energized as a halo sports car brand by Renault with the rebranding of its works F1 team as Alpine. Now it is teaming up with Lotus to create an all-electric Alpine car. Lotus and Renault are no strangers as Renault acquired what was the Lotus F1 team which later this year will again be rebranded to Alpine.

    This time around the intent is to create the successor to the Alpine A110 in an electric avatar. This one was announced late last week by Renault and Lotus – when both the manufacturers announced that they signed an MoU. “The signing of this MoU with Lotus shows the lean and smart approach we’re implementing as part of the new Alpine brand strategy. Both brands have an amazing legacy and we are most excited to start this work together, from engineering tailored solutions to developing a next-generation EV sports car,” said the two companies in a statement.

    The Alpine A110 has been an iconic vehicle since 1963 and the teaser also points towards the vehicle retaining its iconic design language. The A110 will be the first such electric vehicle but there are six more in the works. Renault at its Renaulution event even showed off an electric version of a car which is being called the Renault 5.

    Renault isn’t the only one all in on EVs. Like most of the auto industry, even Lotus is taking a radical approach towards electrification. It has been developing its Evija hypercar which costs $2 million. It has a 2,000 bhp all-electric powertrain which will come by 2025.

    This partnership clearly has a lot of synergies as the revival of the Alpine brand and the rebrand of the F1 project comes with the intent of creating a virtuous cycle between the popularity of the F1 team driving sales of Alpine cars which would further fuel the F1 project. It also helps that the F1 team was till 2015 the Lotus F1 team.

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  • Knight Frank Hires Asia Workplace Strategist

    Knight Frank Hires Asia Workplace Strategist

    Knight Frank appointed an Asia Pacific lead for the workplace and strategic consulting amidst unprecedented transformation of employee conditions driven by the ongoing pandemic.

    Samarth Kasturia joins Knight Frank in the new role, according to a statement, based in the firm’s regional headquarter in Singapore.

    A trained architect with a Master’s degree in finance and investment, Kasturia has over a decade of consulting experience specializing in workplace and real estate strategy. He has previously advised numerous global firms including Royal Dutch Shell, Standard Chartered Bank, Total SA, Novartis, British Petroleum, Nestlé, Maersk, Uber and Facebook.

    Demand for workplace strategy has increased as corporates look for ways to right-size their offices toward a future that integrates an increased need for collaboration, well-being, and flexibility, said Tim Armstrong, APAC head of occupier services & commercial agency.

  • Maruti Suzuki Hikes Prices Due To Higher Costs

    Maruti Suzuki Hikes Prices Due To Higher Costs

    Maruti Suzuki India Ltd will raise prices for some car models to mitigate the impact of rising costs, the country’s largest automaker by market value said on Monday.

    The move comes after rival Mahindra and Mahindra Ltd increased prices of its personal and commercial vehicles by 1.9% this month due to higher commodity prices and input costs.

    Indian automakers were already under pressure due to costs and weak demand when the pandemic dealt a blow last March.

    Since then, carmakers have resumed operations and seen demand return during India’s festive season in October-November, but have warned of demand uncertainties ahead.

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  • Thai AirAsia to furlough 75% of workforce

    Thai AirAsia to furlough 75% of workforce

    Thai AirAsia will keep only one-fourth of the staff and ask the rest to take a leave-without-pay offer for four months, starting February, as the re-emerging coronavirus outbreak has dealt a heavy blow to the aviation sector.

    Tassapon Bijleveld, executive chairman of Asia Aviation Plc (AAV), the largest shareholder of the airline, said on Monday only 25% of its workforce will be active after this month as the airline is downsizing to match real demand.

    He did not mention the size of the workforce, but according to the latest AAV annual report, it had 5,974 employees in 2019.

    “Before the Covid-19 resurgence, we had 40 planes serving domestic flights. But since the re-emerging of the outbreak, some provincial lockdowns have made it impossible for people to travel and passenger demand has dropped significantly at every airport,” said Mr. Tassapon.

    The budget airline has 62 aircraft, which has not been fully utilized since the first nationwide lockdown in April last year. It flies only 10 planes now due to the sluggish demand for air travel.

    He said the company had no layoff plans for now but it was difficult to predict when the market would recover.

    He said the furlough from next month to May should allow the employees to find other revenue sources and resume work immediately if the situation improves.

    Mr Tassapon said there was little hope for financial support for airlines from the government. Thai AirAsia now is trying to secure loans from banks by itself, instead of waiting for state approval, he added.

    The furlough, the second in the past few months, was larger in scale than the first round late last year.

    “The international market should recover in the last quarter of this year, but only slowly. Half of the global population must be vaccinated before international travel can resume,” said Mr. Tassapon.

    As of September 2020, its staff-related expenses accounted for 18% of operating costs, the second-highest after jet fuel.

    During the first nine months of 2020, the low-cost airline carried 6.68 million passengers, a 60% dip compared to the same period in 2019.

    AAV stocks plunged six satangs, or 2.54%, to 2.30 baht on Monday.

  • AirAsia founder Tony Fernandes claims governments ’ Covid-19 coordination ‘horrific’

    AirAsia founder Tony Fernandes claims governments ’ Covid-19 coordination ‘horrific’

    “The coordination on Covid-19 is horrific,” AirAsia Group Bhd founder and group chief executive officer Tan Sri Tony Fernandes laments and claims in a direct swipe at world governments’ on how the global pandemic has been managed and its impact on the travel and aviation industries.

    BBC has today quoted Fernandes as saying that in his history of running an aviation business, he has never seen something so poorly coordinated.

    “It’s like nothing I’ve ever heard,” he said. “The United Nations, with the travel industry, should have come up with some standard protocols” earlier in the pandemic, but politics had got in the way, according to him.

    “Governments are petrified of their people, and they’re taking a very, very, very conservative view. They all want to be in control.

    “I just think that everyone’s… scared and just reacting in a very jingoistic and nationalistic way. I think countries are going to say, unless you’re vaccinated they’re not going to let you in without quarantine,” Fernandes said.

    The BBC report, which also quoted International Air Transport Association (IATA) director-general Alexandre de Juniac, said the world’s airlines need another US$70 billion (about RM283.5 billion) to US$80 billion of government support to get through the crisis caused by the coronavirus pandemic.

    de Juniac was quoted as saying the figures were “on top of the US$170 billion already granted”.

    It was reported that June 2021 is when he expects the first significant easing of travel restrictions, as the impact of vaccines begins to be felt.

    “Government travel restrictions and a huge fall in passenger confidence meant global demand for flights fell about 60% last year, according to IATA figures.

    “That means 2020 saw about 1.8 billion passengers fly, instead of the 4.5 billion in 2019. In an industry where profit margins were already thin it means airlines are estimated to have already lost US$118 billion, with worse set to come,” BBC reported.

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  • Hong Kong’s Fashionally and ITC Store launch new collaboration

    Hong Kong’s Fashionally and ITC Store launch new collaboration

    FASHIONALLY.com, a non-profit local fashion platform pioneered by the Hong Kong Trade Development Council (HKTDC), has launched a debut collaboration with the ITC STORE of The Hong Kong Polytechnic University (PolyU).

    The store showcases seven fashion brands from the Hong Kong Young Fashion Designers’ Contest (YDC), creating a brand-new online-to-offline (O2O) marketing and promotion channel to nurture business opportunities for local fashion designers at the start of the year.From now to 11 April, the ITC STORE X FASHIONALLY online store will feature a series of local fashion brand items including fabric face masks, women’s knitwear, leather clothing and accessories, and much more.

    Participating brands include ARTO. (designs by Arto Wong), Charlotte Ng Studio (Charlotte Ng), FromClothingOf (Shirley Wong), KURT HO (Kurt Ho), Lapeewee (Yannes Wong), Mum’s Design (Bicy Yeung) and PHENOTYPSETTER (Jane Ng). From now through April, ITC STORE’s physical showroom will showcase exclusive fashion items from selected brands on a monthly basis, providing a new O2O shopping experience for fashion lovers.

    The YDC aims to discover and nurture the next generation of young fashion talents in Hong Kong, providing a launch pad for them to showcase their designs. YDC 2021 is now open for entry with an enrolment deadline of 28 April. For details please visit: www.fashionally.com/ydc_application/

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  • Giordano International warns for a profit decrease

    Giordano International warns for a profit decrease

    Giordano International (0709) warned that it expects to record an annual net loss of between HK$110 million and HK$130 million in 2020, as compared with a profit of HK$230 million in 2019.

    As stated in the interim results announcement last year, a net loss of HK$175 million was recorded for the six months ended June 30, 2020. However, the group expects to record a net profit of between HK$45 million and HK$65 million in the second half of the year due to the positive trend in retail sales and improvement in consumer sentiment.

    The forecast net profit has not taken into account further potential asset impairment charges.

    As of end-December, 2020, the group’s merchandise inventory was worth about HK$435 million, below that of 2019 by about HK$113 million.

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  • U.S. Adds Chinese Smartphone Giant Xiaomi to Blacklist

    U.S. Adds Chinese Smartphone Giant Xiaomi to Blacklist

    Just five days before the official inauguration of President Joe Biden, the Trump administration is making a late push to ban more Chinese companies deemed risky, including smartphone maker Xiaomi and state-owned oil firm CNOOC.

    Xiaomi was one of nine firms added to the Defense Department’s list of banned firms linked to the Chinese military, expanding the original list of over 60 companies.

    The Department is determined to highlight and counter the People’s Republic of China’s (PRC) Military-Civil Fusion development strategy, which supports the modernization goals of the People’s Liberation Army (PLA), said a statement from the Department of Defense (DoD).

    According to the DoD, PLA modernization is being ensured via access to «advanced technologies and expertise acquired and developed by even those PRC companies, universities, and research programs that appear to be civilian entities».

    Financial firms that wish to comply with sanctions on the additional firms will have to rebalance their exposure and many have reportedly done so in recent times, delisting of structured products in Hong Kong or removing constituents from major global index compilers.

    One notable global firm that has bucked the trend by maintaining business ties without complying to U.S. sanctions is State Street Global Advisors, whose Asia unit reversed its decision to remove banned stocks from the renowned Tracker Fund following pressure from Hong Kong officials.

    In the third quarter of last year, the Chinese tech giant surpassed Apple in terms of smartphone sales and entered Hong Kong’s benchmark Hang Seng Index in September. Its current market capitalization exceeds $700 billion.

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  • Motorbike sales slump, blamed on pandemic

    Motorbike sales slump, blamed on pandemic

    Motorbike sales fell 16.6 percent to 2.71 million units last year, according to the Vietnam Association of Motorcycle Manufacturers.

    The industry group comprises five major companies, Honda, Piaggio, Suzuki, SYM, and Yamaha, who account for most of the market.

    Industry insiders said sales fell in double digits because of the Covid-19 pandemic, which hit people’s incomes.

    Although VAMM’s report did not list each company’s sales, Honda said it accounted for nearly 80 percent.

    Other brands not included in report were VinFast, Kymco, BMW Motorrad, Ducati, Harley-Davidson, Kawasaki, and others.

    In the second half last year several companies introduced.

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