Taipei, Taiwan, September 7, 2007 – Delta Networks Inc. (DNI) Chairman and Chief Executive Officer, Mr. Sam Liang, was interviewed by Financial Times Taipei Correspondent Ms. Kathrin Hille on September 6, 2007. Hille is doing a special report on DNI as the first Taiwan-based networking company listed in Hong Kong. Delta Networks is a networking ODM company listed in Hong Kong stock exchange on July 6, 2007 and Financial Times is a world famous global finance newspaper agency.
Central questions raised by Hille in the interview were, “ Why did DNI choose to list in Hong Kong instead of the Taiwan Stock exchange?”; “What are some of the challenges of listing in Hong Kong?”; “What is the plan after the IPO?”
Chairman and CEO, Sam Liang described the history of the company explaining the mission and goal of DNI and mentioned that IPO had been planned for a while. “While DNI is a global company with clients who are leading international telecommunication equipment providers, well-known enterprise solution providers, and global brand name vendors of SOHO networking products, maximizing the reach of global investors is very important.” DNI once considered listing on Nasdaq, however, DNI recognized the benefits of its own region by turning to the capital market of Asia that is considered to be abundantly both Asian and International. Hong Kong turned out to fit this bill very well. Since 90% of public offered shares are allowable to financial institutions, such as Deutsche Bank, Alliance Capitals, and Fidelity hold DNI shares immediately after the IPO.
Chairman Liang continued to describe to Hille about some challenges of listing in Hong Kong. The first task of the day was to familiarize DNI’s product, capabilities, company, and customers to the Hong Kong investors. DNI wants to assure investors that they will get information on the company very effectively. Not only will DNI establish an investor’s relations office in Hong Kong, but also will consider holding semi-annual and annual investors conference in Hong Kong. Chn. Liang further explained how the Hong Kong’s adopted financial reporting standard (IFRS – International Financial Reporting Standards) is different than the method used in Taiwan (GAAP – Generally Accepted Accounting Principles), which is how peer companies of DNI are doing their reporting. Taiwan GAAP does not take share-based compensation into consideration, where as the Hong Kong IFRS does. This is important to consider when associating DNI with peer companies in its industry particularly in P/E comparisons. For example, without share-based compensation, gross profit margin and the percent-profit from operations to revenue is higher; giving 17.3% and 12.1% for the six months ending June 30, 2006 and 18.3% and 13.5% for the same period of 2007, respectively. DNI’s profit for the period without share-based compensation is US $28.3 million; US$15.8 million is share-based compensation. The share-based compensation impact on DNI is stronger this year due to the fact that the share price of Delta Electronics Inc. (DEI) has appreciated almost double, making the compensation higher than usual.
DNI continues with good performance for the first half of this year. Growth rate was in the double-digits for the first half and the improvement of gross profit mainly came from an increase in revenue from existing customers and first-shipments to new customer. Percent-profit from operations to revenue for June 30, 2007 grew by 26.7% compared to that of June 30, 2006. Cash and Cash Equivalents at June 30, 2007 was US$95 million, representing an increase of US$39 million from the same period in 2006. DNI shipped new Network Attached Storage (NAS) product to customers and was also awarded wireless router projects by one of the top PC producers.
“Plans after the IPO are very exciting and are focused in generating more growth for DNI,” says Chn. Liang. Liang is traveling to China in a couple of weeks to survey a new factory site. This survey is part of an expansion plan that is aimed at doubling the current manufacturing capacity DNI has in China. DNI’s future plans also include adding more engineering capacities across Taiwan and China.
About Delta Networks Inc.
Delta Networks Inc. (DNI) is a fast-growing Original Design Manufacturer of networking products with reputation of quality manufacturer with strong in-house product design, development and customization capabilities. DNI products include Ethernet switches, broadband access products, wireless adaptors and routers, services include product and manufacturing design and test engineering. DNI has sales offices in the United States, Japan, and Europe; manufacturing plants in Taiwan and China, research centers in Taipei and Shanghai. More information about DNI can be found at http://www.dninetworks.com.
Mr. Sam Liang was the president of D-Link Corporation and also held engineering and management positions at Rockwell, Siemens, and Ericsson. Mr. Liang joined DNI in 2002 as DNI’s Chairman and CEO and is responsible for developing and implementing DNI’s strategic objectives and business plans.
About Financial Times
The Financial Times is a leading global finance newspaper. The publications in the US, UK, Europe, and Asia have over 1.6 million readers and its official website has over 3.9 million on-line readers. In survey conducted by Internationale Medienhilfe, The Financial Times was named the world’s best newspaper.
Ms. Kathrin Hille is the Taipei Correspondent of Financial Times and is also the president of Taipei Foreign Correspondents’ Club. Ms. Hille will visit DNI’s DongGuan manufacturing facilities in late September.
Delta Networks Inc. Investors Relations:
Shelly Yen, Delta Networks Inc.
Tel: 886-2-87972088 ext 3312
E-Mail: shelly.yen@delta.com.tw |
