First Pacific Company Ltd (FPC) is a Hong Kong public listed holding company with business interests in telecommunications, infrastructure, consumer food products and natural resources. FPC started in 1981 as a small Hong Kong-based financial services company established to allow four of Indonesia's richest families the Salim, Sutanto, Sudwikatmono and Risjad, as a vehicle to funnel their wealth overseas. The Salim family is still the main shareholder in the holding company. Sudwikatmono has a small participation. FPC is a shareholder in four publicly-listed companies in the Philippines and Indonesia, Philippines Long Distance, Metro Pacific Investment, Philex and Indofood.
[...] It also operates a flour mill First Pacific History Liem Sioe Liang (林绍良) was born in China's Fujian province in 1916. In the 1930s, Liem moved to Java, in Indonesia, to work for the peanut oil company run by his uncle and brother. In his 20s, Liem struck out on his own, entering the coffee and cloves trade, supplying cloves to the kretek (clove-flavored cigarettes) industry, and soon expanded into other goods. But the key to Liem's fortune lay in the Indonesian war for independence of 1947-49. [...]
[...] Aggressive acquisitions in 2008-9 need to be ‘digested' First Pacific PHILIPPINES LONG DISTANCE TELECOM Strong Dominant telecom operator in the Philippines with nearly 40 mn subscribers. Enjoys the position in wireless and wireline markets. Competitor Globe Telecom unable to compete in many segments. Prepaid wireless service (very income inelastic) accounts for 55% of total service revenues. Strong RoE- close to and attractive dividend yield of 7-8%. Weaker Potential regulatory overhang has still not completely dissipated. Capex may have to be increased due to ongoing broadband expansion First Pacific Macroeconomic Overview PHILIPPINES CPI inflation to move slightly higher helped in part by deadly typhoons in October. [...]
[...] FPC's annual and financial reports are in English and Chinese but not in Bahasa or Tagalog, a reflection of its background; overseas Chinese in South East Asia First Pacific Overview of holdings INDOFOOD SUKSES MAKMUR Strong One of the world's largest instant noodle producers. Largest flour miller in Indonesia. Four complementary business groups- consumer branded products, bogasari (flour), agribusiness, distribution- enabling vast economies of scale. Strong brand equity across Indonesia market of 230 mn consumers of which roughly 45% are below 30 years of age). [...]
[...] This is positive for Indofood's margins First Pacific Contribution to FPC group profits is still led by PLDT. Contribution to FPC operating profits (USD mn) Share of FPC operating profits 1H 2009 1H2008 1H 2009 PLDT Indofood MPIC Philex First Pacific Technical analysis A brief overview of the stock behavior indicates that on a weekly basis, support is round the 50-wk moving average. Volumes have picked up last week as the stock dropped 10%. The daily charts clearly shows volume rising on the downside. [...]
[...] Asset price bubble is a possibility First Pacific Key Indicators- form an integral part of the analysis Real GDP growth, y/y Philippines Indonesia Inflation y/y Philippines Indonesia Official Policy Rate HK 3 mths Hibor Philippines 91-days T-Bills Bank Indonesia Rate 2009E 2010F 2011F 2009E 2010F 2011F 2009E 2010F 2011F Currency (vs USD) period avg 2009E 2010F 2011F Philippines Peso Indonesian Rupiah Hong Kong $ E (Estimates)/ BL F (Forecasts)/ BL, Nomura, CLSA 10 First Pacific Main Assumptions i. Risk free rate (combination of Philippines and Indonesia) Base risk free rate Country risk free rate Total risk free rate ii. [...]
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