07.05.2001
Overdue loans expected to remain high

• Development: Hualon Corp. (1407 ‘Hua Long’) bounced one of its authorized checks in the amount of NT$102m. The company has a total of NT$17.4bn in bank loans.

• Analysis: The major creditors are UWCCB (NT$2.5bn), Chiao Tung (NT$1.7bn) and Grand Commercial (NT$1.6bn). We expect smaller banks to suffer if Hualon is unable to repay the loans.

• Primasia View: We believe an increased number of enterprises involved in traditional businesses will likely become insolvent in future as overdue loans are unlikely to improve by 3Q01.

WilliamFong@Primasia.com +886-[0]2-2547-8864