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Technology Stocks : AsiaInfo Holdings Inc - (ASIA) -- Ignore unavailable to you. Want to Upgrade?

To: Anchan who wrote (104)	8/21/2002 1:10:22 PM
From: waitwatchwander	Respond to of 115

Chinese telecoms gear makers face tough year forbes.com Reuters, 08.21.02, 6:14 AM ET By Jonah Greenberg BEIJING, Aug 21 (Reuters) - China's makers of telecoms gear are revealing profit falls this year in the wake of a bumper 2001, after restructuring telephone firms cut spending and the world's biggest cellular market turned cautious, analysts say. China split its fixed-line telephone giant into two in May, sparking turmoil that could greatly delay construction of large-scale networks, industry sources said on Wednesday. The country's two mobile firms, more cautious after a record network build up last year, have slashed spending plans this year by as much as 20-30 percent, analysts say. "This year's results certainly cannot compare to last year, because China's telecoms operators' combined investment will be less than last year," said Wang Jiawei, an analyst with Great Wall Securities in Beijing. "And equipment makers are seeing a trend of shrinking profit margins. So that even if sales go up, their profits wouldn't necessarily." Over the last two weeks, all of China's listed telecommunications equipment makers have posted a fall in first-half profits on the year. Eastern Communications Co Ltd said on Tuesday interim profit was down 47 percent, possibly posing a risk to its plan to raise at least $450 million via a Hong Kong listing this year. ZTE Corp posted a drop of 27 percent on the year, Nanjing Panda Electronics reported a fall of 44 percent and said the prospects of its network equipment venture with Ericsson may remain bleak all year. ACROSS THE BOARD Hangzhou-based Eastcom attributed its slack performance of 69.47 million yuan in net income partly to "more competition in telecommunications equipment manufacturing market" and sharp drops in the margins on those products. Network spending by both mobile and fixed-line operators in the first six months was down 36 percent on the year, official figures cited by the China Daily's Business Weekly show. Nanjing Putian Telecommunications Co Ltd, based in the southern city of Nanjing, said last week its first-half net profit plunged about 87 percent on the year, to 940 million yuan. One reason decisions about network spending are still on hold is that new people are assuming posts at China Telecom and China Netcom Group, the country's two fixed-line giants. "China Netcom, if they want to build something in Zhejiang province, they will have to hire a senior person from Zhejiang Telecom to do that work, because that's the only person who has the experience," James Ding, chief executive of telecoms software maker AsiaInfo Holdings, said. "That started to cause turmoil in both organisations, because China Telecom is going to do the same thing in the 10 provinces of China Netcom," he said. China Telecom's networks in 10 northern provinces were handed over to China Netcom Group -- a newly formed company -- in a restructuring to pave way for major overseas share sales and to improve shoddy services and bring down prices. China Telecom plans a $2.4-4.9 billion overseas share sale later this year. ($1=8.276 yuan) Copyright 2002, Reuters News Service