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Technology Stocks : PCW - Pacific Century CyberWorks Limited

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To: ms.smartest.person who wrote (445)	2/25/2001 8:40:32 AM
From: ms.smartest.person	of 2248

EDITORIAL - Family concerns Prev. Story -------------------------------------------------------------------------------- The news that Richard Li Tzar-kai's Pacific Century CyberWorks is paying US$103 million (HK$803 million) for a satellite business owned by Li Ka-shing's Hutchison Whampoa - thereby giving his father a stake in the battered telecoms company - has certainly cheered CyberWorks' shareholders. Shares in the firm jumped four per cent on the news yesterday. Both companies are pointing to the commercial logic behind the move, which will be funded by CyberWorks issuing new shares, meaning the elder Mr Li will hold 0.83 per cent of his son's company. CyberWorks says the move will help it accelerate the regional expansion of its services. Hutchison in turn says it is ridding itself of a non-core holding, enabling it to concentrate on more important things, such as its 3G phone networks. Elsewhere eyebrows have been raised, suggesting this was a case of father aiding son. Hutchison's shares fell yesterday amid those worries. However, both companies have denied the deal is simply a show of filial support. CyberWorks shares rose at least in part because investors reckon the elder Mr Li knows a bargain when he sees one. If he believes a stake in CyberWorks is worth having, investors then think so do we. The younger Mr Li however faces further challenges that go beyond yesterday's deal. Most immediately there is the issue of who will buy Cable & Wireless' 14.9 per cent stake in the company. CyberWorks will be hoping that yesterday's rise means the share price has turned a corner. Others will be looking to see how the move - along with the purchase by CyberWorks' Japan arm of a network game development company - welds with the company's other core businesses. Investors will want to see more evidence beyond the deal with his father that Richard Li has a strategy and vision for a market that has become unforgiving over the past year for many companies such as his. focus.scmp.com

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