06.19.2001
KG Telecom attempts to raise funds

• Development: DoCoMo will spend NT$1.87bn (NT$30 per share) to participate in KG Telecom’s new share issue, bringing total holdings in KG Telecom to 21.43%.

• Analysis: The cash generated by KG will be allocated to launch an i-mode like service in 2002. However, the amount of cash raised will be NT$6.7m less than expected - not enough to finance the plan.

• Primasia View: We estimate KG Telecom to generate EPS NT$0.90 in 2001, which we consider poor performance. Combined with limited capital funding suggests further weakness in share price.

GeorgeWu@Primasia.com +886-[0]2-2547-8878