Subject: [NEXTEL-1] Giant Wireless Makes 50 percent Motorola FRS Radios.

From: [email-masked]
Date: Tue, 24 Jun 2003 09:01:59 -0400

Giant Wireless expects boostfrom new contract
Its profit for year to March was below expectations, rising
7% to HK$55.5m

GIANT Wireless Technology Ltd's
results for the year ended March
31, 2003 might have been
disappointing, but the Hong Kong-based wireless telecom product designer and maker
looks poised to deliver a significant double-digit growth in sales and profit this
year when a preliminary global sales and distribution contract is finalised.

Yesterday, the mainboard-listed company
reported a 23 per cent growth in FY03
sales to HK$1.15 billion (S$254.8 million),
boosted by higher sales of its cordless
phones in the main markets of US and
Europe. Its net profit rose 7 per cent to
HK$55.5 million, below analysts consensus
of about HK$61 million. But some analysts
acknowledged the results were achieved
amid tough market conditions,
exacerbated by the severe acute
respiratory syndrome (Sars), notably in China, where the company has its
factories.

For FY03, Family Radio Service radio (a walkie-talkie set with 5-20km range
retailing around US$30 to US$80 a pair) accounted for almost 44 per cent of
turnover due in part to higher demand from the US.  Cordless phones accounted for
about 38 per cent. Major customers included Motorola, Conair, Cobra, Viking and
Olympia.

Going forward, Giant's managing director Max Loong said during an interview that
FRS radio demand is expected to grow: 'We expect the liberalisation of the
air-wave by different countries to lead to greater use of FRS products. In fact,
we see FRS becoming a mainstream electronic consumer product.' FRS is not allowed
in Singapore.

Mr Loong estimated that 15 million FRS units will be sold globally this year, up
from 12 million last year and 8 million the previous year. Giant makes about 50
per cent of the global supply on behalf of Motorola.

Things are looking more rosy for Giant, which enjoyed a 13 per cent gross margin
in FY03 and has a net cash of HK$70 million.  The company has a preliminary
agreement with a major MNC, widely speculated by the market to be Motorola, to
take over the MNC's global sales and distribution functions for one of its
wireless products.

'This would be mainly in the US and Europe. But in Europe, the MNC only has UK and
Germany. So there's a huge potential to expand to other parts, even to Australia
and New Zealand,' Mr Loong said.

'Conservatively, for the first 12 months we could see a significant growth in
revenue and profit,' he added.

The contract is a significant milestone for Giant as it will move the group up the
supply chain from manufacturing to include marketing and distribution, which will
help Giant compete better with low cost China manufacturers. Giant is in talks for
more such marketing and distribution rights and outsourcing opportunities from
MNCs.

A slew of new products in the coming months will fuel earnings growth. These
include the wireless instant messenger, which uses AOL's portal to send and get
e-mail messages. About 15,000 pieces (retailed at US$79 each) have already been
shipped to the US. This year, 150,000 pieces are scheduled to hit the US with
another half a million pieces targeted next year.

Giant, which typically pays out a third of its earnings as dividends, plans to
continue doing so, Mr Loong said. He added that this translated to a 4 per cent
yield based on its initial public offer price of 32 Singapore cents a share back
in May 2000.

http://business-times.asia1.com.sg/story/0,4567,84982,00.html

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