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Tag: asia

  • Vietnam’s Bamboo Airways moves a step closer to starting operations

    Vietnam’s Bamboo Airways moves a step closer to starting operations

    Privately owned FLC Group last month agreed a $5.6 billion deal to buy 20 Boeing Co planes at current list prices and in March signed a memorandum of understanding with Airbus for up to 24 planes.

    The government said on Tuesday that Bamboo Airways will invest 700 billion dong ($30 million) during 2019-2023 on 10 Airbus or Boeing planes, but it was unclear whether it would rent or buy planes initially.

    It will become Vietnam’s fifth airline. It has yet to receive an aviation licence but the government said in a statement on Tuesday that it had authorised “The Ministry of Transportation to evaluate and issue an air transport business license in accordance with the law.”

    FLC has said it expects the airline to begin operations in 2019 and launch direct flights to the United States and Europe and position itself as a hybrid airline, combining traditional and low–cost models, the company said in a statement on Tuesday.

    Vietnam’s four airlines are flag carrier Vietnam Airlines; budget operator Jetstar Pacific Airlines which is partly owned by Vietnam Airlines; budget carrier Vietjet Aviation and Vietnam Air Services Co.

    The country’s airport capacity has been reaching its limits as fast economic growth means more people in the nation of 90 million are taking flights.

    Hanoi-based FLC, whose main businesses are housing, resorts and golfing, had said it planned to operate international flights through Bamboo Airways to tourist spots in Vietnam including where FLC has properties and also plans domestic flights.

  • Jollibee makes debut in Macau

    Jollibee makes debut in Macau

    The popular Filipino fast food franchise Jollibee has opened its first restaurant in Macau.

    Long queues are seen from as early as 7am outside the Jollibee Macau store, with many of those in line being Filipino nationals. A large Jollibee mascot entertained diners as they waited to be served.

    Macau has a strong population of Filipinos working in the casino and f&b sectors.

    The company opened its first restaurant in Milan earlier this year, and also added a venue in Canada where the brand has plans to open 100 stores within five years. Further expansions into the UK, Malaysia, and Indonesia are also in the works.

    Jollibee currently operates in several countries in Southeast Asia and the Middle East, as well as Hong Kong and the US.

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  • The evolving Indian luxury market

    The evolving Indian luxury market

    India – every year is a growth story, despite complaints and gripes, the market grows! In the past 5 years, India has seen the beginning of a new cultural emergence from the prospective of retailers, manufacturers and the customer and consumer. The span 2017-2020 appears to be the decade quarter of evolution. There are number of small yet critical factors which clearly demonstrate the decade quarter of evolution that has continued in India and more importantly the way the luxury fashion market is developing on a fiscal and cultural prospective.

    There was a time when purchases in fashion were either need based or one off aspirational purchases. As we have seen, especially since 2015, fashion purchases have evolved to a more desire and aspiration based activity. Across the luxury pyramid 4 categories are seen as more than a basic need. The items worn reflect the consumer’s personality, and is perceived by them as a status symbols. With the growth of international influence and more correctly put, the emergence of a pan-global target audience, each brand, regardless of its Tier, price and country of manufacturing, represents an aspirational value.

    Its not just international brands we are referring to, the growing demand and redefined allocation of flexible income towards fashion, along with the newly restored pride in ‘Made in India’, has opened the doors for domestic brands today. With three of the largest department stores launching their own private labels, while not all are a luxury to the better travelled among us, nearly 28 percent of retail clothing sales from structured retail today comes from the department store segment including Shoppers Stop, Pantaloons and Westside among others. These department stores have effectively offered home grown alternatives to international high street fashion brands such as Zara and H&M. With Westside planning to expand beyond Indian borders, the coming years could very well give a much needed impetus to manufacturing in India.

    The currency advantages, higher quality of manufacturing and lower manufacturing costs in India, provide a key advantage to all brands that are manufacturing in India and selling globally today.

    KK Shirts launched in 2014, is a small outfit selling a limited run of 1,000 shirts globally every year, proudly ‘Made in India’, matching the quality of ready-to-wear shirts provided by far more established European brands. The shirts are priced modestly between Rs 6,000 to Rs 18,000 (45 GBP to 200 GBP) whereas a big boxed store would sell a similar quality and care for at least 2.5x, using sustainable textiles and environmentally friendly dyes and prints. The brand, in 2017, was sold out of all its shirts in a record 8 months period. It’s surprisingly good for a brand which neither banks on social media nor advertises, but just relies on the word-of-mouth from its customers and targets consumers who want a shirt from a brand which is different and cares as much about the process and the end creation as much as the consumer does about the taste of the food they eat.

    International brand launches are not to be left behind, while we have H&M open up across the country in the premium affordable market, we have also seen brands such as Ted Baker, which back in London, is a common department store and non-luxurious brand, in India’s newest luxury mall, The Chanakaya. Ironically ultra luxury or haute luxury niche shoe brand, EL Chaussure decided that malls in India are not yet luxurious enough to match their other stockists such as Harrods in London and chose to continue to offer their designed-to-desire shoe service online and through a partnership with Excedo Luxuria in India. They allow customers to design and order their own shoes online and then have them hand made by craftsman in Great Britain, Italy and Spain.

    The latest launches clearly show the consumer and customer of today is ever willing to look at newer brands and they are open to new brands, both international and domestic, which can provide value for money (that’s different from being cheap), support in defining a social status, is globally appealing and most importantly, is fashionable and in season.

    With the increase of foreign investment as well as local investment, local businesses infrastructure continues to develop driving down the mid-term cost of operations, logistics and even top level manufacturing costs.

    Given the glocal opportunity, e-commerce shopping continues to grow specifically when looking at the Omnichannel strategy. Investments in retail will continue largely focused on providing the customer an unbeatable personalised customer service. It was estimated that Rs 2,00,000 crore was invested in retail in 2016 and by 2020 its expected to double. With core and inter-market consolidation such as Reliance Brands’ acquisition of 40 percent of Genesis Luxury, it is making way for the original founders to pursue wider opportunities and growth, and giving Reliance the ‘influence’ to align benefits and market strategies.

    With investments being made in retail, we can expect the contribution of Tier -II and -III cities’ towards total luxury fashion spending increase, though in our experience, many key buyers are driven by the psychology of buying the best and buying better than those in the metropolitan cities, a higher status symbol and far better value for money. This mind set gives way to a list of haute luxury brands such as Swiss Luxury, Laurent Ferrier, along with higher end industrial luxury brands such as Kiton, a luxury made-to-measure clothing from Italy. These niche labels entice new customers and educate them in their own brands’ prospectives; without them being over exposed to Massitige and mass luxury fashion brands advertising such as Louis Vuitton or Christian Dior.

    The least obvious but one of the most critical evolutionary points, is the definition of luxury fashion. Fashion, till recently, was limited largely to clothes and immediate clothing accessories. As time progressed, categories such as shoes, jewellery, watches and accessories have been included, in the truest term. Today, the luxury fashion market includesa full wardrobe from innerwear to watches like Versace or the more niche Lytt Labs. With a variety of options and each design bearing in mind the modern day buyers’ wardrobe, lifestyle and functionality; the interchangeable straps on a Lytt Labs represents this exact mindset, with over 300 different straps available, from black leather to green, red and blue tartan, all changeable within a minute at home.

    Overall, the immense growth charted for the luxury fashion segment in India is nothing short of exciting; but with all enticing opportunities come challenges. There are not in surmountable challenges though. Consolidation is a wise move and I would expect to see further mergers and some inter-market investments reducing the competition domestically and increasing competition for international brands, providing the end customer and consumer with better service.

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  • Korea’s M Corset listing for IPO to boost awareness

    Korea’s M Corset listing for IPO to boost awareness

    South Korean underwear retailer M Corset is going public on the Kosdaq secondary bourse.

    The IPO has been announced as a move to improve the firm’s brand awareness in Asia. Its initial share price is being set at KRW10,100 to KRW11,500 (US$9–$10.35) per share, or up to 29 billion won (US$26 million) based on the top-end price.

    A spokesperson for the company at the press conference for the IPO said “We will use our IPO momentum to make inroads into Asian markets, including China.”

    The brand, which has an almost 20-year history, made the leap from TV home-shopping channels to brick-and-mortar stores through the success of its 19 underwear brands for men and women under 19 – the most popular of which is Wonderbra, which made up 43 per cent of its total sales of KRW124.3 billion (US$112 million) last year.

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  • Xiaomi shares fall in Hong Kong trading debut as US-China trade war deter equity investors

    Xiaomi shares fall in Hong Kong trading debut as US-China trade war deter equity investors

    Xiaomi, the first company to raise capital under Hong Kong’s overhauled listing rules for pre-revenue start-ups or companies with multiple classes of stock, sputtered during its trading debut on the city’s exchange when investors spooked by the US-China trade war refrained from buying its shares.

    Shares of the Beijing-based company, offered a week ago at HK$17 each in what was once billed as the world’s biggest initial public offer, fell by as much as 5.9 per cent in an advancing market to HK$16, before recovering to end their first trading day at HK$16.80.

    “Investors are no longer that crazy about so-called new economy IPOs, as many of them have quickly fallen below their offer prices,” said Edmond Hui, chief executive for Bright Smart Securities.

    “It’s no longer a guarantee of making money.”

    The lacklustre debut was a blow for the world’s fourth-largest smartphone maker, which had taken a mere seven years to grow from a start-up to surpass 100 billion yuan (US$15 billion) in sales. Founded by serial entrepreneur Lei Jun in 2010, Xiaomi was the first blockbuster IPO under the new listing rules that Hong Kong’s securities regulator and stock market operator pushed through last year.

    “Xiaomi’s listing signals the Hong Kong market has entered a new phase,” said the city’s Financial Secretary Paul Chan Mo-po, speaking in Cantonese during a ceremony marking Xiaomi’s trading debut. “I believe [Hong Kong’s listing reform] will prompt more innovative technology companies to raise funds in Hong Kong, so our market can better serve the real economy.”

    The size of Xiaomi’s fundraising – originally aimed at US$10 billion – was trimmed by bad timing, coming after the US and Chinese governments fired the first salvoes of their trade war.

    Net proceeds from the IPO were HK$23.98 billion (US$3.1 billion), after deducting underwriting fees and other relevant expenses, Xiaomi said. The company priced its stock at the low end of a price range of between HK$17 and HK$22 each.

    That values the company, whose name is the Chinese phrase for millet, at US$54.3 billion, about half of the US$100 billion it had originally sought, which would’ve made Xiaomi the world’s largest IPO this year. Instead, that honour has gone to Siemens Healthineers, which raised US$5.17 billion in Frankfurt in March.

    “Although the macroeconomic conditions are far from ideal, we believe a great company can still rise to the challenge and distinguish itself,” Xiaomi’s founder and chief executive Lei Jun said in a brief speech at the start of trading. “From day one, innovation has been an integral part of Xiaomi’s DNA,” he said, adding that the listing would be “a brand new start for Xiaomi.”

    It plans to use 30 per cent of the proceeds for research and development, 30 per cent to expand and strengthen its capability into the internet of things business, 30 per cent for global expansion, and the remainder for working capital and other corporate purposes.

    Four of the five biggest tech IPOs in Hong Kong since September are now trading below their offer prices.

    Lei, who founded Xiaomi in 2010 and currently holds nearly one third of the company’s stock, has been presenting Xiaomi as an internet company rather than a hardware maker, saying it should be valued as hybrid of Apple and Tencent because it is “driven by innovation”.

    Companies billed as manufacturers, like tech giant Apple, tend to achieve much lower valuations than those categorised as internet firms, for example China’s Tencent.

    Investors were not the first to question Lei’s categorisation. In mid June, the company shelved a plan to issue Chinese depositary receipts (CDRs) in Shanghai after the market regulator demanded answers to 84 questions, including why Xiaomi positioned itself as an internet firm.

    The smartphone maker has tapped several Hong Kong and Chinese tycoons as investors, including Li Ka-shing of CK Hutchison, Pony Ma Huateng of Tencent and Jack Ma Yun, founder of Alibaba Group Holdings and owner of this newspaper.

    Xiaomi’s seven cornerstone investors have agreed to acquire US$548 million worth of shares with a six-month lock-up period, according to the prospectus.

    US chip maker Qualcomm has committed US$100 million, the only foreign company among the cornerstone investors. China Mobile, the country’s biggest telecom operator, will also invest US$100 million, while CICFH Entertainment, a state-backed industrial fund, will be the biggest cornerstone investor with a US$192 million stake.

  • Allianz Real Estate aims to raise China investment in new economy, logistics

    Allianz Real Estate aims to raise China investment in new economy, logistics

    The property investment arm of German financial services giant Allianz expects China to soon account for up to half of its Asia-Pacific fund allocation, up from the current 40 per cent, with a focus on the new economy and logistics sectors.

    Rushabh Desai, its Asia-Pacific chief executive, revealed on Monday the insurer and asset manager has just bought an office tower in a Beijing software park, already fully leased out to Chinese tech firms.

    It expects to complete another purchase in a Shanghai business park “within a couple of weeks”, he added.

    “We want to be aligned to the new economy and contribute toward China’s growth in the sector; we’re investing based on that thesis,” Desai said. By new economy he refers to non-traditional industries such as biopharmaceuticals and online retail.

    Allianz Real Estate is just one of a number of foreign investment firms betting on growth in the commercial property markets of China’s top-tier cities, driven by high demand from small start-ups to large companies.

    The firm has effectively bought the Beijing office tower – dubbed ZLink and valued at US$185-195 million – outright (98 per cent) in an all-cash deal from private equity firm KaiLong Group and Goldman Sachs, Desai said.

    The ability to pay for such deals without financing and close them in just eight weeks was vital in helping Allianz secure the purchase, Desai said, even though it might not have been the highest bidder as sellers prefer to avoid China’s lengthy financing periods.

    He said the firm is on the hunt for opportunities in Beijing and Shanghai office space, as well as in warehousing. Its portfolio already includes co-investing in two Shanghai office towers.

    Allianz Real Estate has a global portfolio growth target of over €1 billion (US$1.17 billion) by the end of 2018, from around 800 million to 900 million euros at present and is well on track to meeting that, he said.

    The property investment business also manages €56 billion worth of assets around the world, a tenth of which is in Asia-Pacific. Desai said the trade spat between the United States and China has had little impact on his firm’s investment decisions, and that post-deal asset management is more important.

    “We monitor political risk but we keep it out of our investment decisions and try to focus on asset level,” he said.

    “As an asset investor, we look at the quality of asset, their location and management. We look to outperform the market, so even if there’s a trade war or impact, we hope our investments will do better than our competition. That is all we try to do.”

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  • Tesla Buyers in China Are Early Casualties in Trade Wrestle

    Tesla Buyers in China Are Early Casualties in Trade Wrestle

    Tesla buyers in China will be among the first consumers to feel the pinch from the U.S.-China trade dispute.

    Price listings on Tesla’s Chinese website increased by nearly 20% this weekend. It came after the U.S. and China on Friday imposed tit-for-tat tariffs on $34 billion of each other’s goods, which affected U.S.-built cars exported to China including Teslas.

    The Silicon Valley electric-car maker had briefly cut prices by about 6% after the Chinese government reduced its tariffs on imported cars to 15% from 25% on July 1.

    But that cut proved short lived. The measures imposed Friday raised the tariff on Tesla to 40%.

    A basic Model S sedan now costs roughly $128,400, up from $107,300 last week, while a Model X sport-utility vehicle costs $140,100, compared with $117,100.

    A Tesla dealer in Beijing said there were still some cars in stock with lower price tags that were delivered before the new tariffs were imposed, but that inventory was very low.

    Tesla plans to build a plant in Shanghai to serve the local market, but for now it only produces vehicles in the U.S. Last year, it sold about 17,000 cars in China, its second-biggest market globally, generating more than $2 billion in revenue.

    Unlike most auto makers, Tesla sells its cars through company-owned stores instead of franchised dealerships, allowing it to set prices. It has 30 stores in China, according to its website.

    The tariffs the U.S. and China imposed on each other present companies with a dilemma: Risk a loss by absorbing the cost or risk market share by passing it on to consumers. Beijing has been looking for ways to shield its companies and consumers, for example by trying to direct purchases of soybeans to Brazil and other suppliers.

    China’s Commerce Ministry said Monday it would use the added revenue from the increased tariffs to provide relief for affected companies and workers. Also Monday, the executive office of the State Council, China’s cabinet, issued a notice Monday calling for an increase in imports while stabilizing exports to promote more balanced trade.

    Tesla isn’t the only auto maker that builds in the U.S. and ships to China: BMW AG , DaimlerAG and Ford Motor Co. all sell U.S. imports in significant volume here.

    Last week, Ford said it has no current plans to raise retail prices on its China imports in response to the tariff hike. Ford sold roughly 65,000 imported Lincoln vehicles in China last year, as well as nearly 19,000 Fords. Locally produced cars comprised more than 90% of its sales.

    Daimler said it didn’t plan to pass the entire cost of the tariff rise onto its customers.

    Sales of high-end imports such as Tesla’s are unlikely to be hit severely by the price increase, according to analysts, since buyers of luxury cars tend not to be price-conscious.

    But the pain will spread if the trade war continues, a saleswoman at an import-export company based in Shandong province predicted.

    The company imports U.S. auto parts that are subject to the new tariffs, which means higher prices for its Chinese buyers. They are negotiating with American suppliers on how to divide the higher costs, she said, but they will most likely be absorbed by her company, the saleswoman said.

    “In the short term, our vendors are still talking and discussing prices,” she said. “But in the long term, I think it will definitely have an impact on our business.”

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  • Volvo Car Malaysia launches new Batu Pahat 3S centre

    Volvo Car Malaysia launches new Batu Pahat 3S centre

    Volvo Car Malaysia, together with its newest dealer AJ Premium Motors, have launched a new Volvo 3S centre in Batu Pahat to serve customers in the Southern region. The new dealership is part of the company’s sales and aftersales transformation programme, with more locations set to be introduced later in the year.

    “There is growing interest for our models in Malaysia and we are actively setting-up dealerships in strategic areas around Malaysia to better service this need,” said Lennart Stegland, managing director of Volvo Car Malaysia.

    “It is an absolute requirement for all new dealerships to adhere to the Volvo Retail Experience (VRE) standards, consistent with our dealership standards in Europe – it is not just an aesthetical guideline but also dictates the level of service rendered in our dealerships,” added Stegland.

    Volvo Batu Pahat features a Scandinavian-inspired ‘living room’ where customers can relax while being attended to by a sales representative or while waiting for the vehicles to be serviced in one of the two service bays in the facility.

    “Our presence in Batu Pahat makes it more convenient for owners from the surrounding areas of Muar, Kluang and Segamat to service their cars or for prospective customers to view new Volvo models,” said Jacky Ong, managing director of AJ Premium Motors.

    The 3S centre is located at Lot. 1005, Jalan Kluang, 83000 Batu Pahat, Johor, Malaysia and it is open from 9am till 6pm on Monday to Saturday, and from 11am to 5pm on Sunday and public holidays.

     

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  • Vietnam can import beef from Brazil again, says Deputy PM

    Vietnam can import beef from Brazil again, says Deputy PM

    Vietnam will consider importing beef from Brazil again if food safety conditions are ensured, Deputy Prime Minister Vuong Dinh Hue has said.

    At the recent Vietnam-Brazil Trade and Investment Forum attended by around 100 enterprises in Sao Paulo, Brazil, he also said Vietnam could become the top importer of corn and soybeans.

    A quality control scandal in Brazil early last year led to 20 countries, including Vietnam, suspending the import of Brazilian meat. Many countries have since resumed imports after receiving explanations and commitments from the Brazilian government.

    It was said the forum that Brazil will also increase import of coffee, catfish and shrimp from Vietnam.

    Hue noted that in 10 years of trading and investment relations, import-export turnover of Vietnam and Brazil has reached $4 billion, most of it from agricultural products.

    Vietnam’s imports from Brazil in 2017 reached $1.8 billion, according to the General Statistics Office of Vietnam.

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  • Apple and Samsung duke it out in South Korea

    Apple and Samsung duke it out in South Korea

    South Korea’s capital Seoul is one of the world’s most technologically advanced, known for its rapid Internet speeds and advanced infrastructure.

    It was one of the first to introduce city-wide free Wi-Fi, and 5G will be introduced commercially in 2019. It is the home of global tech titans Samsung and LG. But in one way Seoul lagged behind other cities.

    Apple announced the opening of their first retail stores in May 15, 2001. Four days later, on a Saturday, the first ever Apple stores opened in Maclean, Virginia, and Glendale, California. “The Apple stores offer an amazing new way to buy a computer,” said the late Steve Jobs, Apple’s CEO at the time.

    Over the years more stores opened, going on to stock the iPod, the Macbook Air, and the iPhone. Tokyo got its first Apple store in 2003. London a year later. Beijing in 2008. And the Middle East in 2015 with Dubai’s Apple store.

    But South Korea, the 11th largest economy in the world and one of the most technologically advanced, saw its first Apple store open on January 26, 2018.

    In the Apple outlet is located in Garosu-gil,we see a fashionable street in trendy Gangnam-gu, popular with tourists and chic locals. Inside the pristine and meticulous store, lined with four potted trees at its entrance, were a busy amount of people.

    Ju-Won Shin, 38, an accountant, was sitting down at a table looking to buy an iPhone SE, while already owning an iPhone 6S and iPad Pro. What does he think of Apple? “Their products are easy to use, refined, and have a good vibe,” he said. Shin preferred Apple to Samsung because “they’re constantly trying hard to make good quality products.”

    Another store wanderer was So-ri Lee, 22, a waitress at a cafe, who was browsing phone cases. So-ri had an iPhone 8 and had been using it for two years. Before that she owned a Samsung Galaxy Mega. She said she preferred iPhone because she loved the design– “it’s pretty and easy to use, and now I’m used to iOS,” she said.

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  • RM Williams coming to China

    RM Williams coming to China

    Boot retailer RM Williams will open stores in China later this year, according to a report by the Australian Financial Review.

    The decision to expand into the fast growing consumer market was made by brand-owner L Catterton Asia, with chairman Ravi Thakran telling the AFR he expected at least a 50 per cent lift in earnings and a 40 per cent increase in sales supported by the expansion.

    The Chinese market has been rapidly proving its worth to retailers, with Starbucks China vowing to double its store-countover the next five years and Prada sales slipping in every market barring China, where it saw a modest 4.6 per cent growth.

    A recent report by Azoya Consulting and Frost & Sullivan found that 87 per cent of local brands view the market as a lucrative opportunity – with over 500 million online shoppers in China.

    The study found that Australian retailers are moving to invest in their owns paths to the Chinese market, hoping to sell directly to the consumers rather than through e-commerce platforms.

  • Rentals rise in downtown Saigon as supply stagnates

    Rentals rise in downtown Saigon as supply stagnates

    Office rentals in downtown Ho Chi Minh City have been rising steadily over the last three months, a new report says.

    Grade A office rent has seen a 7 percent increase in the second quarter over the first quarter and 17 percent increase over the same period last year, the report said.

    A similar increase, of 7.3 percent over last year, has also been seen in Grade B office rentals.

    The report attributes the rice in prices to high demand and limited supply.

    In the last one year, office vacancies in new buildings have been rapidly filled, with vacancy rates for both Grade A and B offices at below 5 percent, the report says.

    In the second quarter of 2018, the HCMC market has not received new office space supply. Total Grade A office supply remained unchanged at 382,763 square meters, while Grade B office space rose slightly by 968 square meters to 814,330 square meters.

    Dang Phuong Hang, managing director of CBRE Vietnam, predicted that Grade A office rents would continue to increase through 2019 or early 2020, with supply remaining limited. Office vacancies will become increasingly scarce, she said.

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  • United Nude Philippines debuts in Manila

    United Nude Philippines debuts in Manila

    Dutch shoe retailer United Nude Philippines has announced its first store will be at Resorts World.

    The brand was established in 2003 by architect Rem D Koolhaas and Galahad Clark. Without any fashion experience, Koolhaas applied his existing design experience to creating new, avant-garde shoes.

    According to Koolhaas, “We ended up breaking the rules of shoe design, not for the sake of breaking them, but simply by not knowing them.”

    The brand’s most successful product is the Mobius shoe, with a single contiguous strip for the sole and heel. Similar architecture-inspired design features are now the brand’s trademark style.

    “From the beginning, something that’s very important for us is that we design for a much larger group of people who have great interest for design, and not so much for trends or following trends but for people who have their own style,” says Koolhaas.

    “As designers, we do our best to (at the same time) innovate and experiment. But on the other hand just to create something that’s good enough to last for longer.”

    United Nude Philippines will open at Newport Mall, Resorts World, in Manila in September.

  • Samsung’s streak of record profits comes to an end

    Samsung’s streak of record profits comes to an end

    Samsung Electronics set records with its last seven quarterly operating profits, but its hot streak has come to an end.

    The tech giant said in its second-quarterly earnings guidance Friday that its operating profit fell by 5.37 percent from the previous quarter of 2018 to an estimated 14.8 trillion won ($13.3 billion).

    Its revenue also dwindled by 4.23 percent from last quarter to 58 trillion won. Analysts believe disappointing sales of Galaxy S9 smartphones and reduced profits from its display business were the main factors behind the sluggish results.

    The operating profit for the April-June period was lower than analyst’s earlier consensus of 15.27 trillion won, which was compiled by market information provider FnGuide.

    The guidance provides averages for the range of operating profit and revenue for the quarter, Samsung will release confirmed figures by business sectors three weeks from now.

    When compared to the second quarter of 2017, operating profit was up by 5.19 percent, but revenue fell by 4.92 percent.

    “Operating profits at all of the business sectors at Samsung for the second quarter are forecast to fall, except for semiconductors and consumer electronics,” said Lee Soon-hak, an analyst at Hanwha Investment and Securities. The ongoing supercycle in the chip industry is still boosting Samsung’s earnings, he added.

    In the first quarter, Samsung’s semiconductor division posted 11.55 trillion won in operating profit, the best result in the company history. Analysts project the profit from the division amounts to more than half of Samsung’s entire second-quarter operating profit.

    The IT and mobile division, which is in charge of smartphones, is projected to have made only around 2.5 trillion won in operating profit, down more than 2 trillion won from the 4.6 trillion won it made in the second quarter of last year.

    Samsung’s flagship Galaxy S9 smartphone, launched in March, has underperformed relative to market expectations. The phone is expected to be Samsung’s least popular Galaxy S model since 2012’s Galaxy S3.

    Eugene Investment and Securities lowered its shipment estimate for the Galaxy S9 in the second-quarter from 15 million to 9.5 million units. It also decreased its expected total 2018 shipments for the S9 to 31 million units, down 19.5 percent from 2017’s S8, which shipped 38.5 million units.

    Some other brokerage houses are also revising their yearly sales estimates for the S9 to below 30 million. Consumers and experts say the phone lacks unique features compared to its predecessor.

    Samsung shares ended 2.29 percent lower at 44,900 won on Thursday, an all-time low closing price since the company’s shares were split 50 to 1 at the end of April. Ever since the split, Samsung stocks have fallen by 15.3 percent. But according to analysts, Samsung shares may have hit rock bottom, given that concerns over second-quarter earnings have been sufficiently reflected.

  • Airwallex rings up US$80 million from Tencent and Sequoia

    Airwallex rings up US$80 million from Tencent and Sequoia

    The Melbourne-based startup announced today a US$80 million series B led by Tencent and Sequoia China and joined by Asia-Pacific investors Hillhouse Capital, Horizons Ventures, Central Capital Ventura, and Square Peg Capital.

    The deal is believed to be the second largest in the country, and is the largest raised by a startup in Australia this year.

    Airwallex provides cross-border transactions and money transfers.

    It will use the funding to expand in Southeast Asia, starting out with Singapore and Hong Kong.

    Airwallex co-founder and chief operating officer Lucy Liu said that some banks had technology that constrained their ability to deal with new payments possibilities, and that it therefore needed to have funds to build its own solutions in some cases.

    “The user interface and user experience will only get us far, so with this round we’ll be looking for more licences in key banking areas, either via acquisition or applying for our own,” Ms Liu said.

    “The regulatory deposits required for this are one of the reasons we’ve raised so much.”

    For instance, Ms Liu said Airwallex would consider a virtual banking licence in Hong Kong, with “financial inclusion” of small-to-medium enterprises throughout the region an aim.

    “So many SMEs, including in Australia, are trying to grow internationally but are hit by barriers around payments and foreign exchange,” she said.

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