In June, former Thai Prime Minister Srettha Thavisin ordered the drafting of a bill to legalize entertainment complexes in the country, a move that could boost tourism spending, increase employment, and revive the economy again. Apart from state lottery or licensed horse betting, gambling is currently illegal in Thailand.

Paetongtarn Shinawatra is now Thailand’s new prime minister, but analysts all agree that the bill will still likely be passed. If that likely outcome becomes a reality, Thailand’s casinos could generate 187 billion Thai baht ($5.5 billion) in revenues, or 1% of the country’s GDP, according to Maybank research. The country could be Macao and Singapore’s largest competitor by the end of the decade. “The Thai government has seen the positive impact on the economy by opening up gambling/casinos as in the case for Singapore, and the power of the gaming dollar in Macau. This move could boost Thailand’s attraction as a tourist destination,” said Tim Tsang, CEO of Companies.Asia, a business consultancy for Corporate Asia.

KTP GLOBAL CONSULTING
KTP Global, a consultancy with emerging dominance in Asia, sees the legalization of gambling in Thailand, and the associated development of the hotel and entertainment industry will offer almost unlimited opportunities for profits and growth that would last at least until the end of this and next decade.

For more information on how we can help, please contact us: consulting@ktpglobal.ca

PricewaterhouseCoopers, trading as PwC, is headquartered in London. It is the world’s second largest professional services firm measured by 2013 revenues.  PwC has offices in 776 cities across 159 countries and employs over 180,000 people. It had total revenues of US$31.5 billion in its 2012 fiscal year, of which $14.9 billion was generated by its Assurance practice, $7.9 billion by its Tax practice and $8.7 billion by its Advisory practice. The firm was formed in 1998 by a merger between Coopers & Lybrand and Price Waterhouse. The trading name was shortened to PwC in September 2010 as part of its major rebranding strategy.

Ernst & Young (known as EY), also headquartered in London, operates as a network of member firms which are separate legal entities in individual countries. It has 175,000 employees and more than 700 offices in over 150 countries. EY is ranked third of the Big Four, based on its 2013 revenues of US$25.8 billion. It provides assurance, financial audit, tax, consulting and advisory services to companies.

KPMG, the result of merger of Peat Marwick International and Klynveld Main Goerdeler in 1987, has its global headquarters in Amstelveen, the Netherlands. KPMG employs 152,000 people and has three lines of services: audit, tax, and advisory. Its advisory services are further divided into three service groups – Management Consulting, Risk Consulting, and Transactions & Restructuring.   Its 2013 global revenues are US$23.4 billion.

THE HONG KONG SCENARIO
The Big Four in the world are still ranked top 4 locally in Hong Kong, at least in terms of staff strength. For the year 2013, PwC reduced its number of staff by 100 while Deloitte increased its staff by 200 to tie for the top spot at 2400 each. The momentum seems to be with PwC though, as it finished the year with a proposed merger with management consulting firm Booz & Co. to complement PwC’s advisory business. According to respective spokespersons, this merger will bring 275 Booz partners and more than 3000 professionals to the PwC network in 33 countries.

Ernst & Young is third in Hong Kong with 2100 professionals, up from 2000 in the previous year.

KPMG increased its recruitment effort to arrive at 2000 staff, up from 1700 the previous year, to place 4th in terms of staff size in Hong Kong.

BDO is still ranked fifth with 1000 employees, unchanged from the previous year.

Currently, the managing partners for PwC, Deloitte, EY and KPMG in Hong Kong are respectively Cassie Wong, Joseph Lo, Agnes Chan and Andrew Weir.

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The Chinese company, with headquarters in Beijing, Singapore, and Morrisville (U.S.), and more than 27,000 employees globally, now has a 14.9% share of the global market, compared with 15.5% for HP, according to figures from IDC, the research company.

Lenovo beat industry estimates with sales increase of 35% to $8 billion in the quarter ending June 30, 2012, and quarterly net profit rose 30% from $108.8 million to $141.4 million.  Of the US$29.6 billion revenue so far for 2012, 58% has been earned outside of China.

Lenovo’s unit sales in the U.S. grew 6.1% in the 2^nd quarter compared to a 10.6% decline for the overall U.S. PC market.  According to IDC, Lenovo now has a 8% market share in the U.S., its largest ever.  The increase came at a time when the PC market overall has stopped growing, with consumers more interested in spending money on smartphones and tablets.  In July, figures from Gartner Research showed a 0.1% decline in overall global sales.

Lenovo was founded by Liu Chuanzhi with a group of 10 engineers in Beijing in 1984 with 200,000 yuan in startup capital.  It was incorporated in Hong Kong in 1988 under its previous name, Legend.  In 1994, Legend became a publicly traded company after listing on the Hong Kong Stock Exchange and raising nearly $30 million. The company name was then changed to its current name in 2003 and millions of dollars were spent in the rebranding campaign.  Lenovo’s acquisition of IBM’s PC business in 2005 accelerated its access to foreign markets as well as improved its branding and technologies.  Lenovo inherited from IBM the ThinkPad line of notebook computers, but it eventually launched its own IdeaPad line of laptops and IdeaCentre desktops in 2008.

“The company’s growth can be attributed to a number of factors, primarily aggressive pricing strategies, overseas acquisitions as well as strong sales in China.  Unlike its competitors HP, Dell and Acer, Lenovo’s decision to focus on sales rather than on profit margins explains why its operating margin is only 1.4%, compared to Dell’s 6.2% and HP’s 7.4%,” said Andrew Tsang, a research analyst at Companies.asia Consulting.  “Lenovo also benefits from their strong sales position in the China market. Their market penetration in China’s countryside and smaller cities is higher than other computer companies.  The PC growth rate in these cities is still double-digit, which is why Lenovo is able to beat the industry average.”

In 2011, Lenovo acquired control of Medion AG (FWB: MDN), an Essen, Germany-based electronics and computer manufacturer, to bolster its European market position; it also took control of the PC division of Tokyo-based NEC Corp. (TYO/OSE: 6701) by structuring a joint-venture deal.  “We plan to become the world’s biggest PC maker,” Chief Executive Officer Yang Yuanqing said in October 2011.  In all likelihood, he may well accomplish this by the end of this year.  Yang is also stepping up development of smartphones, tablets and Internet-ready televisions to widen Lenovo’s product line for consumers, and plans to offer a new cloud computing service which would allow users to manage information and exchange content between multiple devices.

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In 2010, IBM’s consulting and technology services generated gross margins of 32%. The company’s software business, which accounts for 20% of revenue, had margins of 88% in the 3rd quarter of 2011. IBM also owns more patents than any other US based technology company. It invested $6 billion in R&D in 2010, the equivalent of 6% of its revenue, compared to $3 billion, or 2.4%, at its rival Hewlett-Packard.

The areas that IBM is focusing on now – cloud computing, analytics and emerging markets are part of its carefully planned strategies for global growth.

Earlier this year, IBM announced a $38 million investment to build a new Asia-Pacific Cloud Computing Data Center in Singapore to exploit the potential of cloud computing through its comprehensive solutions and services. The new facility in Singapore will extend IBM’s globally integrated cloud delivery network that includes centers in Canada, the United States and Germany. The company also has 13 global cloud labs, of which seven are based in Asia-Pacific countries namely China, Singapore, Korea, Japan, Hong Kong, Vietnam and India.

Another cloud computing data center will be built in Langfang, a city near Beijing, under the collaborative efforts between IBM and the China-based Range Technology. The 620,000 square meter facility, which is to be owned by Range Technology, is scheduled to be completed in 2016. The data center, the largest in Asia by floor area, aims to serve mainly government departments from Beijing and across the country, but will also be open to major banks and private enterprises throughout China. According to IBM spokesperson Harriet Ip, the center is also designed to support the development of a new information technology hub being built in the area.

IBM’s data-center business in China has tripled in the last four years. In 2010, China overtook Japan as IBM’s second largest data center market, with the U.S. as the company’s number one market. Moreover, the Asia-Pacific market for cloud computing is set to grow 40% per annum through 2014 to $4.9 billion, according to IDC Asia Pacific. IBM is well positioned to take advantage of this growth by establishing regional data centers that will provide the necessary infrastructure for growth of key cloud computing areas.

IBM is headquartered in Armonk, New York. As of September 2011, IBM is the second-largest publicly traded technology company in the world by market capitalization. In 2011, Fortune ranked IBM the 18th largest firm in the U.S., as well as the 7th most profitable. Globally, the company was ranked the 31st largest firm by Forbes for 2011, and 18th most innovative company by Fast Company. IBM employs more than 427,000 employees in over 200 countries, with occupations including scientists, engineers, consultants, and sales professionals.

For 2010, IBM’s brand was valued at $64.7 billion. IBM’s closing value of $214 billion on September 29, 2011 surpassed Microsoft which was valued at $213.2 billion. It was the first time since 1996 that IBM exceeded its software rival based on closing price. However, IBM’s value is still less than two-thirds of Apple’s value of $362.1 billion.

Though faced with strong competitors such as Oracle Corp. (NASDAQ:ORCL), Hewlett Packard Co. (NYSE:HPQ), Microsoft Corp (NASDAQ:MSFT) and EMC Corp (NYSE:EMC), IBM is still viewed by many industry analysts to be a heavyweight in the cloud computing market. Its strong cash balance will no doubt help it acquire more companies with high intellectual property assets, which will drive further growth in the upcoming quarters. New CEO Virginia “Ginni” Rometty says that despite IBM’s deep pockets and $100 billion in 2010 sales, she plans to keep pressing her management team to take more risks and embrace change. “Whatever business you’re in, it’s going to commoditize over time, so you have to keep moving it to a higher value and change”.

Copyright © 2011 …Companies.asia ….All Rights Reserved.

Suzy From The Korean Supergroup Miss A

JYP Entertainment Corporation (KOSDAQ: 035900) engages in the entertainment business in South Korea, Japan, China and other parts of the world. It is involved in the production of movies, TV dramas, and music recordings as well as the management of artists, including such famous Korean supergroups as Wonder Girls, 2AM, 2PM, Miss A, and Rain, under its various labels.

The company, originally named Tae-Hong Planning Corporation, was founded by Park Jin Young, an actor, singer and songwriter in 1997. It eventually became JYP Entertainment in 2001. J. Tune Entertainment Co. Ltd., a record label and artists management company founded by Rain, merged with JYP Entertainment and has operated under the umbrella brand JYP Entertainment Corporation since March 2011. JYP Entertainment is headquartered in Seoul, with offices in New York and Beijing.

Jo Dong-Won is the current Chief Executive Officer and a director of JYP Entertainment Corp. Son Goo-Ho, former managing director of Softbank Ventures Korea Inc., now serves as a director of JYP entertainment. Park Jin Young is also a director of this company.

JYP Nation 2010 (JY Park, Wonder Girls, 2PM, Miss A, Lim Jeong Hee)

JYP Entertainment’s total revenue for the year ended June 2010 was 10.16 billion KRW (USD 8.51 million), according to its annual report, with a net income/loss of 10.36 billion KRW (USD 8.685 million) compared to a 6.35 billion KRW loss for the previous year 2009. Year on year, the company net income fell 63.24% despite revenues that grew 12.15% from 9.06 billion Won to 10.16 billion. An increase in the selling, general and administrative costs as a percentage of sales from 25.2% to 32.86% was a component in the falling net income despite rising revenues.

Many industry analysts believe that the marketing prowess of Wonder Boy Park Jin Young and the global brand value of all the artists and groups managed by JYP Entertainment are underrated company assets that could turn the company around in the future.

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Musubi, Hawaii's Favorite SPAM Treat

Hormel (NYSE: HRL), the maker of SPAM, America’s favorite luncheon meat, has plans to position it as a premium product in China.  A blend of chopped pork shoulder, ham, salt, sugar, binders and preservatives like potassium chloride and sodium nitrite, SPAM made its market debut in 1937 and immediately became the number one selling luncheon meat in America.   It still remains as one of the top brands in Hormel’s family of grocery products, and accounted for close to 15% of Hormel’s $7.2 billion in sales last year.  More than 122 million cans of SPAM products are sold worldwide each year, 90 million in the U.S. alone.  Hawaii has the highest consumption per capita for SPAM and the most popular way to enjoy it there is the musubi, a sushi like roll with grilled SPAM, seaweed and rice.   SPAM’s overseas revenue has doubled in the past five years as it entered Asian markets such as Japan and South Korea.  Burger King restaurants in Tokyo actually have SPAM burgers on the menu.

Hormel currently has 2 factories in China, but only fresh meat products such as pork sausages and pepperoni are made there for retailers and restaurants including Pizza Hut.

Hormel’s plans to introduce SPAM as a premium product into the Chinese market may face cultural obstacles and strong local competitions.  While pork has long been a big part of the Chinese diet, consumers can choose from a variety of fresh meats such as horse and beef as well as other locally produced luncheon meats. The pressure is on SPAM to differentiate itself; hence the premium strategy, which taps into the growing Chinese fondness for foreign and more expensive brands.  Without a large budget for advertising in China, Hormel’s marketers are focusing on product tasting, in-store posters and online Chinese food recipes using SPAM.  The biggest hurdle for Hormel; however, may be its premium pricing strategy.  At about US$3.20 a can, SPAM is almost 40% more than the price of other local brands such as Great Wall and Ma Ling.

SPAM and Shark Fin Soup anyone?

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As of now, no foreign companies are allowed to list in China’s domestic stock exchanges.  China had indicated earlier in 2009 that it would eventually allowed qualified foreign companies to list in Shanghai, with rules and regulations that have yet to be announced.

Currently, Coca-Cola share price ($68.75 as of July 7) is enjoying a gradual upward climb towards its record high of US$88 a share reached in 1998.  Chief Executive Officer Muhtar Kent is continuing the corporate strategy started by his predecessor E. Neville Isdell to refocus the company more on its core products, which include Coke, Diet Coke, and Coke Zero, rather than on its other noncarbonated drinks.  Kent also reconfigured serving sizes globally and introduced minicans and smaller bottles with new pricing to meet consumer demands and boost profit margins.  In 2010, Coca-Cola purchased its largest franchised bottler in Atlanta, essentially bringing it in-house to cut supply-chain costs, and giving the company control of 90% of its North American distribution.

As close to 80% of Coca-Cola’s sales are done outside the United States, Kent plans to spend at least US$27 billion through 2020 for new bottling and distribution facilities in emerging markets such as China and Mexico.  Last year, the company opened three bottling plants in the Inner Mongolia region at a cost of about US$246 million, part of the company’s three-year, US$2 billion expansion plan in China.  A Shanghai listing seems like a logical extension of Coca-Cola’s plan as it would provide access to China’s huge local currency deposits as well as increase the already strong brand value of the best selling soft drink in the world.

Copyright © 2011  Companies.Asia  All Rights Reserved.

Unusual Location For Subway Sandwiches In China

The Subway sandwich group, operated by privately held Doctor’s Associates Inc., has officially overtaken McDonald’s Corp (NYSE: MCD) as the world’s largest restaurant chain in terms of number of restaurant outlets, according to the year-end store count filed by Subway to the Securities and Exchange Commission at the end of February 2011.

Subway has reported that it has a total of 33,749 restaurants worldwide at the end of year 2010, compared to the 32,737 restaurant units of McDonald’s.  That number has already increased to 34,246 units according to Subway’s own corporate count as of March 10, 2011.

Both companies have aggressively expanded into international markets using successful franchise business models during recent years.  Subway was founded by Fred DeLuca and Peter Buck in 1965 when they opened the first store in Bridgeport, Connecticut.  It now has restaurants in 95 countries.  McDonald’s Restaurant as a franchise concept was established by Ray Kroc in 1955 and sold 100 million burgers in just 3 years’ time.  It now has restaurants in 117 countries around the world.  From a revenue perspective, McDonald’s is still leader of the pack with a global revenue of US$24 billion compared to Subway’s US$15.2 billion for the year 2010.

As of March 2011, Subway has 1000 restaurant outlets operating across Asia, including 17 in Hong Kong, 199 in India, 236 in Japan, 63 in Malaysia, 14 in Philippines, 92 in Singapore, 38 in South Korea, 118 in Taiwan, 36 in Thailand, 1 in Vietnam and 199 in China.  According to Don Fertman, Subway’s Chief Development Officer, the company is looking towards China for its future expansion plans.  It is expected that the number of outlets in China will surpass 500 by the year 2015.

Other major restaurant chains are also looking for expansion into Asia, and to China in particular, as part of their overall strategic plans.  Starbucks (NASDAQ: SBUX), already the largest coffeehouse chain in the world with 16,858 outlets in over 50 countries, plans to triple its café outlets in China.  Kentucky Fried Chicken (KFC) with 16,200 restaurant outlets in 105 countries, also the largest and fastest growing restaurant chain in mainland China today with over 3,200 restaurants in more than 700 cities, and Pizza Hut, the largest pizza chain in the world with 13,100 restaurants, and Taco Bell with over 6000 franchise locations, are all operated by Yum! Brands Inc. (NYSE:YUM), which plans to increase its dominance in the global fast food market by opening significantly more stores across Asia in the near future.

Copyright © 2011  Companies.asia

International Patent Filings Dominated By Asia

China, Japan, and South Korea show dominating growth in international patent filings and exhibit a significant shift of economic, competitive and scientific power to Asia, based on data released in February 2011 by the World Intellectual Property Organization (WIPO).

The World Intellectual Property Organization said China had increased its international patent filings in 2010 by 56.2% to 12,337, tripling its 2006 figure and elevating China into fourth place in global rankings.  These figures include a 33% increase in patent filings in electrical engineering and 220% increase in nanotechnology.

South Korea, ranked 5th with 9,686 filings, grew 20.5%, and Japan, a country with a mature economy, still attained growth of 7.9% with 32,156 applications to place 2^nd, and Germany, with 17,171 applications, ranked 3^rd on the list.

The United States is stilled ranked number one, although it experienced a drop of 1.7% to 44,855 filings, some 20% below its 2007 level.  International patent applications by universities are still dominated by U.S. schools.  Leading the pack is the University of California, Massachusetts Institute of Technology, University of Texas, and University of Florida.  Under this ranking, the University of Tokyo follows closely at number 5.

The top 10 companies by filings include 3 from Japan, 2 from China, and 1 from South Korea, with 1 U.S. and 3 European firms completing the list.

Looking at the data from a corporate perspective, Japanese consumer electronics group Panasonic Corporation (NYSE: PC; TYO: 6752) again led the list with 2,154 applications, and China’s telecommunications giant, ZTE Corporation (SZSE: 000063; SEHK: 0763), jumped into 2^nd place with 1,863 applications.  U.S. chipmaker Qualcomm Inc. (NASDAQ: QCOM) was in 3^rd place with 1,677 filings, and Chinese telecoms equipment maker Huawei Technologies Co. Ltd. is in 4^th place with 1,528 applications.  LG Electronics Inc. (KRX: 066570; LSE: LGLD) of Korea takes the 7^th place with 1,298 applications.  Of the top 10 corporate applicants, 6 are from Asia.  The U.S. juggernaut Google Inc. is ranked only 80^th with 171 applications.

Under the Patent Cooperation Treaty (PCT), the WIPO offers inventors and industry an easier route for obtaining patent protection internationally.  By filing one “international” patent application under the PCT, protection of an invention may be established simultaneously in each of the current 142 treaty member countries.

Both applicants and patent offices of PCT member states benefit from the uniform formality requirements, the international search and preliminary examination reports, and the centralized international publication provided by the PCT system.

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Macau Tower With Fireworks At Night

With increasing foreign investments and liberalization of its gaming industry, Macau is currently experiencing unprecedented economic growth.  $7 billion revenue in Macau’s gaming industry surpassed Las Vegas’ $6.1 billion near the end of 2006 to make it the world’s biggest gambling hub.  Analysts estimate that revenue is expected to climb 30% to $30 billion this year and at least another 25% to $38 billion for the year 2012.

Macau now has 33 casinos and more are being developed and built.  Until 2002, Macau gambling was a monopoly; casinos were controlled and operated by tycoon Dr. Stanley Ho’s flagship company Sociedade de Turismo e Diversões de Macau (STDM).  Casino operators now include foreign casino giants such as Wynn Resorts, Sands and MGM Grand.  Sands opened on the Macau waterfront in 2004 and earned back its $260 million investment in less than a year.  Continuing its success, Sands opened in the summer of 2007 the 3000-room, 350 shop, $2.4 billion Venetian Macau, a hotel, casino and shopping complex, the largest of all the casinos in Macau and the first of many family and convention-friendly developments to come.

According to Macau Government statistics and CLSA research report:

Stanley Ho’s SJM Holdings (subsidiary of STDM) is Macau’s largest casino operator, with a 32% share of Macau’s gaming market.

Sands China, the Macau arm of Sheldon Adelson’s Las Vegas Sands Corp., is the owner of the Venetian Macao, the world’s largest casino by floor area.  It has a 16.5% market share.

Wynn Macau, owned by Las Vegas based Nasdaq listed Wynn Resorts (Nasdaq:WYNN), has a 15% market share.

Galaxy Entertainment Group (HKSE:00027) has a market share of about 12.6%. Launched in 2004, Galaxy owns 4 casinos, the StarWorld Resort, and the Galaxy Macau Resort (to be opened early 2011).

Nasdaq listed Melco Crown Entertainment (Nasdaq: MPEL), run by Stanley Ho’s son Lawrence Ho, has about a 11.7% share. It owns the City Of Dreams, Altira Macau Resorts and several smaller Mocha Club casinos.

MGM china, a 50-50 joint venture between MGM Resorts International and Stanley Ho’s daughter Pansy Ho, has a 11.6% share.

During the year 2010, close to 25 million people visited Macau, an increase of about 15% from the year before; however, less than 12% of the visitors were from outside of China, Hong Kong or Taiwan. There were 13.3 million visitors from mainland China last year, accounting for 53% of all the visitors to Macau for 2010. The number of international visitors; however, has increased only slightly for 2010 over the previous year.  “We hope we can gradually raise this, for over the long-term Macau ought to develop the international market,” Maria Helena de Senna Fernandes, deputy director of Macau’s Tourist Office, said during a news conference.  “Strategy-wise it’s very important for us to go for diversity.  Diversity in terms of product, and diversity in terms of the markets we are pursuing.  So international markets will be very important in the future.”

Currently, the Macau gambling industry generates over 40% of the GDP of Macau.  Taxes on gambling profits generated over 70% of Government revenues annually.

The recent controversy surrounding Stanley Ho’s decision to transfer shares in Lanceford Co., the company that controls SJM Holdings Ltd., to the families of his second and third wives, together with the absence of a clearly defined succession plan for his empire, had caused the shares of SJM to plunge and no doubt resulted in sleepless nights for investors and shareholders….

But then again, Macau, like Vegas, is a city that never sleeps.

Copyright © 2011  Companies.asia      All Rights Reserved.