Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: Rarebird who wrote (35529)	8/26/1998 7:53:00 PM
From: John Rieman	Respond to of 50808

Rare, good comentary on current market conditions. If the US economy goes into recession, the S&P profits will decline, not grow. First Call though Q3 would grow 15%, on July 1. Today, they are below 5% on Q3. They should look out a few more Qs, IMO. A big correction, that lasts, could be the nail that causes a US recession. A couple of points: At these prices, Chinese consumers ARE NOT AS LIKELY to defer VideoCD purchases in an economic slowdown, as they are purchases of more expensive durable goods." What the hoot does this mean? In a currency devaluation, prices on VCD will only move up 10%, VCD sales will dry-up during the crisis. Months afterward, people will buy the VCD players they delayed(could hit 1Q). The lower currency will push DVD more out of the reach of the masses, delaying the day when VCD dies, and benefit C-Cube. There is some Risk that China will Devalue its currency China will devalue its currency around the March, 1999. It's the meeting of the People's Congress. That's when all of the years major policies are made, for China's next year. They will probably float the Hong Kong dollar, and have a convertable Yaun to the Hong Kong dollar. Effectively a devaluation. Beijing has also intimated that the will to resist a devaluation would depend on Japan's ability to keep the yen from depreciating further. Beijing is pushing Japan/US to do something. If they are successful, the US Fed cuts rates/Japan adopts economic stimulus measures. If China enters a deflationary period, they would devalue to raise prices. Deflation is good for the consumer but it's terrible for the Gov't because it means lower tax revenues. By devaluing enough to cause inflation, the tax revenues can increase, the gov't can continue to spend. China is experiencing deflation today. And it's bad for sales figures................................... cei.gov.cn China's Retail Sector Suffers Drops in Sales, Profits Overshadowed by a sluggish macroeconomics climate, China's shopping malls suffered sharp decreases in sales and profits in the first half of this year. China's retail sector, suffering from a buyers' market, posted weak growth of 6.8 percent in the first half of this year, plunging 4.2 percentage points from the same period last year. Moreover, the national retail price index has also seen adverse growth for nine consecutive months, down from -0.4 percent last October to -2.1 percent in June, according to the State Statistics Bureau (SSB). As supermarkets and chain stores spring up across the country, the profit margins of large stores unavoidably shrink. An SSB report show that 57.7 percent of the leading 260 department stores suffered declining profits in the first half of this year while 25 percent of them were in deficit. However, experts held that profits may rebound in the second half of this year as the government investment available to expand domestic demand takes effect. China Economic Information(08/17/98) The bottom line is VCD, will grow by around 50% in in units, during 1998. C-Cube's market share and average selling price are growing. For the next 3Q, VCD revenues are flat, at worst.

To: Rarebird who wrote (35529)	8/26/1998 8:36:00 PM
From: John Rieman	Read Replies (4) \| Respond to of 50808

New VCD franchise in Malaysia..................... Zaroma to offer franchise system The New Straits Times ZAROMA Club (M) Sdn Bhd plans to strengthen its retail channel by introducing a franchise system aimed at individuals and companies wishing to set up a business with low capital. According to the company's president Shamsul Ismail, the franchise system is a unique way of promoting video compact disks (VCD), video home system (VHS) or video tape movies, cartoons, educational documentaries and related products through retail and rental. "Currently, we have about 10 franchisees and now we are looking for more than 60. This system can give business opportunities to retrenched workers and retirees, for example, especially now when the country is facing an economic downturn," Shamsul told Computimes in Kuala Lumpur last week. The franchise system comes in various categories including outlet set-up (retail), outlet set-up (rental), home set-up (rental), catalogue retailing system, territorial franchising (State by State), promotion booth set-up (retail). Investment for either an outlet set-up for retailing and rental costs is under RM20,000, said Shamsul. "To set a home set-up for rental, the capital needed is RM13,000 and this consists of a complete set of library stack," he said, adding that a franchisee of any of the three categories will be charged a licensing fee of RM2,000 annually and a one-time RM200 processing fee. According to Shamsul, a franchisee of the catalogue retailing system (selling or renting through catalogue), needs to pay RM500 for the licensing fee and RM200 for the processing fee. The next category - the territorial franchising, denoting a master franchise and a subsidiary of Zaroma - will represent a State to distribute the VCDs. To start a business in this category, a franchisee needs a budget of more than RM20,000. Finally, to start the promotion booth set-up (retail), a franchisee needs an investment of less than RM6,000. The franchisee also need to pay RM2,000 for the licensing fee annually. Shamsul said Zaroma is looking for individuals or companies interested to sell VCDs at its promotion booth for the Kuala Lumpur Commonwealth Games '98. According to him, among the benefits of participating in the franchise system are monthly updates and new releases (minimum 20 to 30 movies a month) and credit facilities. At the moment, Zaroma is in the process of working with the Entrepreneur Development Ministry to offer financial assistance to would-be franchisees. "In addition, we also give support in management, product availability, product variety, exchangeable products, advertising and promotions, advice and consultation, marketing management and consultation, and training," Shamsul said. "We have the latest concept and technology of retailing and rental. For example, if you have 10 outlets in Malaysia and you want to monitor your outlets from your home or any other location, we have the system to help you do so," he added. The system is capable of monitoring and detecting the price of each product, the amount and time any item is rented, and rental revenues from any outlet, he said. The system comprises a computer software installed in an outlet's computer server that can be connected to a barcode or other tracking systems. To observe activities in an outlet, the owner can link the system using a modem and the telephone line to a personal computer (PC). Price of the system for one outlet is between RM30,000 and RM40,000. According to Shamsul, the current economic situation encourages people to reduce spending on entertainment outside the home. However, he said, home entertainment becomes an alternative, creating a demand for video cassettes and VCDs. Zaroma has so far brought in more than 5,000 copies of titles and is negotiating with companies like Warner to buy additional licences. The company is aiming for between RM5 million and RM20 million in revenue this year. It is also considering merging with a public-listed company in order to expand. Zaroma will soon venture into the international market by exporting its VCDs to Australia and the United Kingdom, said Shamsul. (Copyright 1998)