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Technology Stocks : AUTOHOME, Inc -- Ignore unavailable to you. Want to Upgrade?

To: Still Rolling who wrote (14586)	8/16/1999 11:33:00 AM
From: Estephen	Respond to of 29970

August 15, 1999 Dow Jones Newswires Asian Stock Focus: Bundling Products To Drive C&W Optus - By Graham Morgan - SYDNEY -- Forget the 74% jump in net profit, analysts say: Just keep your eye on Cable & Wireless Optus Ltd.'s (A.CWO) Internet user uptake and its joint venture with Excite@Home Corp. (ATHM). It has spent, spent, spent on high-tech equipment and services, but soon C&W Optus will start unlocking the value of its cyberspace business by bundling it together with pay TV unit Optus Vision, and its telephony business. C&W Optus, which is 53%-owned by Cable & Wireless PLC (CWP) of the U.K., posted a A$113.1 million net profit in the year to June 30, against its A$65 million prospectus forecast. Net profit before abnormal items and tax was A$205.1 million - a profit generally anticipated by analysts to be closer to A$300 million in the current fiscal year. Chief Executive Chris Anderson said after the company's first annual meeting last week that the bundling strategy is now one of C&W Optus' top priorities. In particular, he highlighted the growth in the company's Internet customer pool, which reached 86,000 people by the end of the fiscal year, up from 25,000 people a year earlier. The joint venture with U.S.-based, high-speed Internet service provider Excite@Home, named Optus@Home, is due to go fully online by the end of this year, offering C&W Optus surfers access to Excite@Home content. Greater access to content will boost the number of Internet subscribers, analysts say, and encourage more customers to cut costs by bundling the Internet service with C&W Optus' pay TV and telephone services. - C&W Optus Shares Seen Long-Term Buy - Around 98% of local telephony customers also use the company's long-distance service and around 39% of customers using its long- distance services take the local telephony service. Separately, around 70% of all new pay TV subscribers take an additional product, as do around 23% of all customers connected to the C&W Optus' hybrid fiber cable, or HFC, which enables access to the Internet. Excite@Home and C&W Optus plan to offer Australian customers fast access to the Internet via the HFC in Sydney, Melbourne and Brisbane. Shares in C&W Optus are a short-term buy at "entry opportunities" - when the price dips - and a buy in the long term, according to Brent Mitchell, an analyst at Shaw Stockbroking Ltd. "The company is still putting things in place in a rapidly expanding market. People were expecting too much too quickly," Mitchell said, explaining his short-term recommendation. C&W Optus is the third-largest player in the Australian Internet market behind dominant local concern Telstra Corp. (TLS) and U.S.-based MCI Worldcom Inc. (WCOM), with around 350,000 Internet subscribers apiece. The disparity in C&W Optus' Internet user figures and those of its rivals, comes from its late start in the sector, according to Shane Hodson, an Internet analyst at Hartley Poynton Ltd. C&W Optus was slow to recognize the potential of the Internet, Hodson said, and lost valuable ground in the early days of the Net revolution but he thinks the joint venturers have the wherewithal to catch up. "It was late out of the blocks, but (C&W) Optus has made up a lot of ground. This shouldn't be a worry - people need to remember that the business is nothing new for Excite@Home," Hodson said. "Growth and use of the Internet will explode further, and C&W Optus will continue its phenomenal growth (in Internet subscriptions)," he noted. - No Dividend Payout In 1999, 2000 - What might worry potential equity investors is that the joint venture will be a financial drain on C&W Optus, because the new business is expected to run at a loss initially. In addition to that, C&W Optus Chairman Sir Ralph Robins reiterated at the general meeting that the company won't pay a dividend in 1999 and 2000 as outlined in the prospectus. When questioned about a possible dividend, Robins said the board would stick to what it said in the prospectus but after 2000 it will review the payout policy. C&W Optus listed on the Australian Stock Exchange in November 1998. Retail investors paid A$1.85 a share, while institutions paid A$2.15 a share. -By Graham Morgan; 61-2-8235-2962; graham.morgan@dowjones.com