Electronics

Loeb’s Sony sequel has makings of a blockbuster

8 Apr 2019

The activist behind Third Point is building a stake in Sony and getting the Japanese group to sell its movie studio could be part of the plan, Reuters reported. The media landscape has changed since Dan Loeb last tried to break Sony up. The idea looks ready for prime time.

Two big clouds eclipse Samsung’s silver lining

3 Apr 2019

South Korea's $270 bln chipmaker already flagged a dismal first quarter because of a glut. Fewer competitors mean supply cuts could more readily lift prices. But Samsung investors may be underestimating the risks of both stockpiled inventory and weaker demand from new industries.

Gadgets light up Xiaomi’s future

20 Mar 2019

The Chinese giant defied a global phone slump with a 53 pct jump in 2018 sales to $26 bln, even after a sluggish fourth quarter. Bets on cheap-and-cheerful markets are paying off, as is a shift to pricier devices. Despite boss Lei Jun's internet ambitions, hardware still matters.

Toshiba’s big early miss invites investor revolt

13 Feb 2019

The Japanese electronics giant has cut its operating profit forecast by two-thirds barely three months after giving guidance. That doesn’t inspire confidence it can deliver on its five-year strategic plan. Toshiba’s large cohort of foreign shareholders could get more demanding.

Cracks at Apple appear in Asia’s supply chains

23 Jan 2019

The iPhone-screen maker Japan Display may get a $550 mln lifeline from investors including a Chinese state-backed fund. Weak sales of the handsets have hurt. A rescue would point to the severe ripple effects of Apple’s woes, and herald pain for other suppliers like Foxconn.

Samsung’s bad news intensifies $70 bln cash bind

8 Jan 2019

The South Korean giant says quarterly operating profit likely fell to a worse-than-expected $10 bln. With chip prices set to drop further, Jay Y. Lee can draw on his cash pile to boost investor returns and invest in new tech, like 5G. His track record in both is less assuring.

Sony’s turnaround will be an activist casting call

21 Dec 2018

Boss Kenichiro Yoshida has boosted earnings at the $61 bln movies-to-video-games group. But he needs to shed a loss-making handset unit and spin off the chip business, among other things. The Japanese company's reluctance to act will see hedge funds make a cameo in Sony's remake.

German retail flop is cautionary tale for spinoffs

9 Oct 2018

Electronics group Ceconomy reported a third profit warning, a year after being hived off from Metro. Thin margins, tough markets and creaky governance mean shareholders’ ordeal won’t end soon. With groups like Thyssenkrupp and VW eyeing splits, it’s a reminder of how not to do it.

Sizing up Chinese tech political risk is perilous

5 Oct 2018

Shares in computer maker Lenovo plunged 22 pct Friday after a news report alleged Beijing agents inserted spy chips into other companies‘ motherboards. Peers fell too. Fear of China’s role in globally integrated I.T. supply chains is growing but the fallout is hard to price.

Samsung is closer to maxing out memory limits

5 Oct 2018

South Korea's tech titan expects quarterly operating profit to hit a record $15 bln, thanks to an upswing in chip demand. Memory prices will probably peak by year-end, however. Slower earnings growth, and the mounting legal woes of Samsung's leaders, will test investor patience.

Foxconn earnings slip is a governance wake-up call

14 Aug 2018

Quarterly net profit at the $50 bln iPhone-assembler badly missed expectations. Steeper costs at subsidiaries and other bets are probably to blame. Boss Terry Gou, though, gives few details on new ventures: without better disclosure, shareholders will be caught off-guard again.

Smartphone slowdown is least of Samsung’s problems

6 Jul 2018

South Korea’s $300 bln tech giant estimates quarterly revenue fell 5 pct from a year earlier. Weak handset sales will recover, though. More worrying are China's price-fixing probe into memory chips and new rules at home that could force a hefty batch of its stock onto the market.

Sharp has better shot at PC reboot than Toshiba

5 Jun 2018

The Japanese group is buying its rival’s laptop business for a song. Toshiba was a PC pioneer, but the last thing it needs now is to battle in this cutthroat, scale-dependent and low-growth industry. Backing from Taiwan’s Foxconn puts Sharp in a slightly stronger position.

Sony loudly demonstrates love of content with EMI

22 May 2018

The Japanese group is buying 60 pct more of EMI Music Publishing from a consortium led by Mubadala. A valuation of $4.8 bln, or 19 times EBITDA, is deafeningly expensive. It leaves no room to doubt new boss Kenichiro Yoshida’s belief in a streaming-led recovery for the industry.

Speed matters for Toshiba’s new CEO

15 May 2018

Nobuaki Kurumatani’s plan for life after memory chips, while vague, suggests a welcome focus on returns. Electronics giants are slow-moving juggernauts, but with hedge funds to keep onside, he needs the $17 bln Japanese group to move faster than rivals like Hitachi have before.

China pivot reduces Foxconn’s appeal

15 May 2018

A Shanghai listing will separate out some of the $52 bln Taiwanese group’s most exciting businesses. It is buying back stock to offset the impact on its own earnings. That doesn’t change the fact that it is turning into an awkward mix of holding company and contract manufacturer.

Samsung is poster child for the “Korea discount”

6 Apr 2018

First-quarter operating profit is likely to rise a blistering 58 pct to $15 bln. Yet Samsung’s shares look cheap, even allowing for challenges ahead in semiconductors. The best fix would be to build on the baby steps it has already taken to improve corporate governance.

Foxconn is manufacturing a higher value in China

20 Feb 2018

The Taiwan assembler of Apple's iPhone plans to spin off a subsidiary onto the Shanghai exchange. Fresh funds will help it push into cloud computing and robotics. Given the new-share pricing norm of about 23 times earnings, Foxconn should be engineering even greater benefits.

Xiaomi IPO could plug into Internet of Things hype

22 Dec 2017

Sales at the Chinese tech company are booming, Reuters reports, probably thanks to a turnaround in smartphones. A mooted $100 billion valuation at listing sounds aggressive, but Xiaomi might be able to position itself as the first big consumer-facing play on the connected home.

Elliott takes activist-buyout firm fight to Japan

11 Sep 2017

The two Wall Street tribes are increasingly at odds. Now Elliott has bought into a $3 bln Hitachi unit that KKR covets, presumably seeking a better price. For private equity groups, mining Japan’s promising seam of corporate carve-outs may be about to get a little bit harder.