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ELECTRONICS
NAREERAT WIRIYAPONG
Despite its high short-term debt, Cal-Comp Electronics Thailand Plc (CCET), the SET-listed semiconductor maker, is aiming to obtain more loans from Chinese financial institutions to finance its new factory in China.
According to CCET director Naririn Tantisajjatham, the Chinese government's recent policy of loosening its regulation of financial transactions, especially of foreign banks operating in China, would allow the company to expand its credit.
"We are negotiating with a few foreign and Chinese banks, operating in China. We need a credit line to run our newly opened fifth factory in China," she said.
CCET's total liabilities stand at 47.1 billion baht, of which 14.6 billion are in short-term loans.
"Short-term loans are rather high because the nature of our business needs high amounts of working capital. But next year we need to be more cautious on funding costs. We need to better manage our risk to be in control," said Ms Naririn.
To control production costs, the company plans to consolidate its parts orders to fewer suppliers, boosting economies of scale and lifting bargaining power with suppliers.
Ms Naririn also expects lower production costs next year, thanks to the decline in commodity prices.
CCET's nine-month net profit was 1.18 billion baht (0.48 baht a share), down 48% from 2.28 billion (0.58 baht a share) in the same period last year.
Nine-month sales were US$3 billion and the company expects full-year sales to reach its target of $3.4 billion.
Despite the sector's gloomy outlook, Ms Naririn said she remained confident earnings next year will be healthy. "We have secured the main orders for next year, thanks to our new European customer," she said.
Analysts have cut their earning forecasts for the electronics sector, projecting a dim outlook for 2009 due to the global financial meltdown and the credit crunch.
KGI has cut its earnings forecast for CCET this year to 2.4 billion baht. CCET's high short-term debt of 14.6 billion baht could also give it a higher financial risk than competitors in tougher business conditions in 2009.
"We expect the company's earnings to contract this year before picking up to 2.81 billion baht in 2009," said Aungkana Tungwikromkrai, a sector analyst at KGI Securities.
CCET has been on track to post revenue growth of 30% this year, with the target to increase by 15% in 2009, said Ms Aungkana.
CCET shares closed yesterday at 1.85 baht, down 15 satang, in trade worth 9.97 million baht.
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