PCCW shares take a beating after grim results
2001-03-31
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The shares of Hong Kong's Pacific Century Cyberworks (PCCW) took a battering on Thursday, after the company announced wider-than-expected losses for FY 2000 on Wednesday.
The stock dived to its lowest level ever since the takeover of Cable & Wireless HKT, falling as much as 14.4 percent intra-day.
The stock fell to HK$2.975, before recovering to close down 6.5 percent at HK$3.25.
On Wednesday, Cyberworks announced a huge loss of US$886 million - double of the market's worst projections.
Huge provisions of US$667 million, a negative equity position of US$1.8 billion, and expectations that the company would not make any breakthrough this year have together put PCCW's shares under heavy selling pressure on Thursday.
Analysts in general remain bearish about the counter, saying that they expect more troubling times ahead.
Kenny Tang, Associate Director of Tai Tung Securities, said: "I don't think the company will have a turnaround in the near future because sentiment of the stock remain weak and also the prospect of the company remain uncertain."
To try to put some certainty, PCCW's Richard Li told analysts Thursday that the company will release a new plan on its B2C flagship Network of the World, or NOW, within the next 90 days.
The market thinks that Cyberworks will combine NOW with HKT's interactive television and netvigator Internet services to save costs.
Cyberworks also expects its B2C unit to break-even within four years.
Meanwhile, Mr Li said telecommunication services will experience a flat year'' because of a further decline in long-distance calling sales.
Going forward, the company will rely on its earnings from its data centers, which are expected to increase their sales three-fold this year.
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