Taiwan’s Acer looks to Internet trading, acquiring a 15.6 percent stake in a PChome subsidiary

January 12, 2014 Leave a comment

Taiwan’s Acer looks to Internet trading

POSTED: 07 Jan 2014 19:44
Taiwanese computer maker Acer said Tuesday it has made its first major investment since overhauling its top management late last year, acquiring a 15.6 percent stake in a PChome subsidiary.TAIPEI: Taiwanese computer maker Acer said Tuesday it has made its first major investment since overhauling its top management late last year, acquiring a 15.6 percent stake in a PChome subsidiary.

While declining to disclose the value of the deal, the statement said the market capital of PChomePay, the payment business of the leading Internet trade group, had increased to TW$450 million ($14.9 million) from TW$380 million as a result.

“Under the ICT industry’s paradigm shift Acer is going beyond hardware-based thinking; the investment in e-commerce and our self-built cloud (Build Your Own Cloud, ‘BYOC’) is our important deployment of ‘hardware + software + services’ transformation,” Acer chairman and company founder Stan Shih said.

Acer termed the deal as part of the “corporate transformation” under way, led by the new management headed by Shih.

The board in November pulled 69-year-old Shih out of retirement to name him chairman and interim president, replacing two top executives who quit in the space of less than a month over the firm’s poor performance.

Then Acer appointed Jason Chen, a former senior executive of Taiwan Semiconductor Manufacturing Co, as both CEO and president, effective from January 1.

Shih has high hopes of Chen, describing him as the “ideal executive to lead our transformation”.

Acer posted a worse-than-expected net loss of TW$13.1 billion ($442.2 million) in the three months to September.

The company has said this was due to a rise in inventory levels and one-time compensation payments related to longstanding litigation.

But it has forecast that shipments of Acer’s notebooks, tablet PCs and Chromebooks will fall 10 percent in the fourth quarter compared to the third quarter.

In the face of the tough outlook, Acer has set up a business restructuring group led by Shih and co-founder George Huang.

Shih founded Acer in 1976 and built it into the world’s second largest PC maker in its heyday, and one of the best known Taiwanese brands internationally, before he retired in 2004.

But Acer’s fortunes worsened in recent years. In 2011 it lost TW$6.8 billion in the second quarter — compared to a profit of TW$3.59 billion in the same period the previous year — as sales were hit by competition from Apple’s iPad.

The company has cut several hundred jobs in Europe, the Middle East and Africa in recent years to reduce operating expenses. It envisages a seven percent cut in its global workforce in 2014.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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