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Public company info - Silkwave Inc , 00471.HK
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Silkwave Inc, 00471.HK - Company Profile
Chairman WONG Chau Chi
Share Issued (share) 1,058,000,000
Par Currency Hong Kong Dollar
Par Value 0.2
Industry Telecomm. Services
Corporate Profile Business Summary: The principal activity of the Group is investment holding whilst its subsidiaries are mainly engaged in the provision of Convergent Mobile Multimedia Broadcasting (“CMMB”), satellite infotainment multimedia technology and services (the “Infotainment”) for vehicles and maritime applications, and trading of printed circuit board (“PCB”). Performance for the year: For the year ended 31 December 2020, the Group recorded loss for the year of approximately US$133,192,000 (2019: US$31,867,000). Loss per share was approximately US52.75 cents (2019: US17.36 cents) and net assets per share of the Group was approximately US$0.44 (2019: US$1.33). BUSINESS REVIEW CMMB BUSINESS The Company currently has a portfolio of 9 UHF spectrum television (“TV”) stations capacity rights in the United States of America (“US”), situated over seven large metropolitan cities, including New York, Los Angeles, Dallas, Houston, Atlanta, Miami and Tampa. The portfolio gives us a significant wireless coverage over the US for delivering free-to-air TV programming such as linear TV broadcasting to a large audience. The Company’s primary business model has been leasing the channel capacity to programmers. Apart from the current linear TV services, the TV platform also well-positions the Company to offer next-generation digital media services targeting household, mobile and vehicles. The US is introducing the Advanced Television Systems Committee (“ATSC”) 3.0 digital standard (“ATSC 3.0”), which is similar to the Company’s CMMB standard, which has evolved to amalgamate with cellular 4G/5G to become the Converged technology standard that can integrate broadcasting, whether from terrestrial UHF TV or a satellite, with terrestrial 4G/5G cellular Internet services for unified consumption in a user terminal with unprecedented cost efficiency and economies of scale. The Converged technology can easily be adopted for ATSC 3.0 will give Company the technical advantage in getting into the future ATSC 3.0 services. INFOTAINMENT In China, the Company’s Converged technology is primarily for supporting connected-car infotainment multimedia services under Silkwave Holdings Limited (“Silkwave”), the Company’s associate. The service delivery is abundant in quantity, ubiquitous in geographical coverage, and very low-cost in data-streaming charge, which is ideal for in-vehicle-infotainment anytime anywhere, and can also be adopted for trains, ships, planes and remote applications. The Company is the dedicated Converged technology and service provider to Silkwave and its many ecosystem partners such as auto-OEM and car electronic makers. It has been supporting trial services over 17 provinces and 21 major cities in China, including Beijing, Changchun, Wuhan, Chongqing, Baoding, Chengdu, Taiyuan, Hefei, Harbin, Daqing, Shenzhen, Xiamen, Jiaxing, Nanjing, Danyang and Huizhou, trucking in 1 million kilometres in road test as well. The business is awaiting regulatory approval to launch commercial services. Parallel to the connected-car multimedia service, the Company has also adopted the Converged technology for maritime use tailoring to ships and boats. It has commenced a maritime service in partnership with Sino Satellite Communication for China early last year. The launch jump-started the Company‘s maritime business platform at large and helped the Company prepare for much bigger service launch that will target potentially the millions of fishing boats and commercial vessels in the South China Sea. Trial service is underway with collaboration from potential regional partners. TRADING BUSINESS This is a challenging sector to operate due to intense competition with low profit margins. Many PCB manufacturers in response to the rising labour and material costs have been diversifying their facilities to other Asian countries. This diversification leads to an increase in competition among existing trading agents and a shrinking PCB market, putting further strain on an already thin operating margin for the sector and hence the Company’s revenue. For the year ended 31 December 2020, the Group recorded loss for the year of approximately US$133,192,000 (2019: US$31,867,000). Loss per share was approximately US52.75 cents (2019: US17.36 cents) and net assets per share of the Group was approximately US$0.44 (2019: US$1.33). Prospects: CMMB BUSINESS As a result of the reassignment of frequencies, the Company has started retrofitting its broadcasting equipment to conform with new FCC guidelines and will continue to do so into 2021. The reassignment has forced certain Company’s leased stations to go silent and hence revenue suspension. Nevertheless, it also brings about new opportunities, such as co-channel sharing with more seasoned TV operators for business synergies, such as channel and revenue sharing, joint marketing, and spreading out operational costs. The introduction of FCC’s ATSC 3.0 will enable the Company’s leased channels to offer unprecedented digital capabilities to garner diverse services, such as Internet broadcasting, data services, and edge device content caching targeting household and mobile users in addition to the traditional linear TV broadcasting. The ATSC 3.0 also carries with it a general requirement for full-power stations who choose to upgrade to ATSC 3.0 to maintain its current ATSC-compatible signal for at least 5 years, while lowpower stations are exempt from this simulcasting requirement. This would mean that low-power TV can act as partners for full-power TV stations to start converting some of their full power services to cater to their audiences and start the general mass market migration to ATSC 3.0 services. In other words, low-power stations can effectively serve as the transitional “platform and hence many new revenue opportunities. Silkwave, the associate of the Company, will bring together the necessary space and terrestrial technology, licenses, content and other partnerships on single platform with complete ecosystem support for in-vehicle-infotainment services in China. The Company plays the role of being a dedicated technology and service provider to Silkwave and its ecosystem partners. As China is the world’s largest automobile market, with nearly 300 million cars on the road and 30 million new cars coming to the market, it will be the Group's primary and flagship market. Silkwave also plans to expand services to other Asia countries via turnkey solution. Silkwave has also enlisted a top-tier investment bank to lead its fundraising to procure a newgeneration satellite to replace its retiring AsiaStar satellite and to support commercial development. The new satellite is expected to have 100 times the power level to multiply Silkwave’s capability to support large-scale mass-market commercial deployment. Currently it is awaiting regulatory approval in China. TRADING BUSINESS There are several factors affecting the business, including life cycle for the Group's clients’ electronic products, saturating demand for generic PCB, export limitation, increasing trade tension between China and the US, which combined to contribute to a somewhat negative outlook for the PCB business. As a result, the Group anticipate the Group's trading business will continue to face challenging times in the year ahead. To tackle that, the Company is ramping up its R&D and up-grading its product capabilities to more niched and higher value-added products, such as the upcoming satellite and connected-car electronics, which the Company has recently tremendous expertise and industry relationship. DEVELOPMENT OF MARITIME PROJECT Earlier in the year, the Company has announced that it has commenced satellite multimedia service for ships and boats in China via partnership with Sino Satellite Communication. The number of ships covered by the service has been steadily increasing as the maritime entertainment industry expands. The Company is also working to expand the business by incorporating its AsiaStar mobile satellite broadcasting capability to provide more expansive services over the South China Sea, potentially servicing the millions of fishing boats, commercial freighters and cruise liners and their many more passengers and operators. The maritime application leverages on the Company’s satellite connected-car multimedia technology ecosystem and is readily adoptable. Trial service is underway. The Company’s AsiaStar is a pan-Asia satellite which covers the whole Southeast Asia and the 9 million square miles of the South China Sea in addition to China. While the Company is awaiting regulatory approval for its connected-car business in China, it will explore different business opportunities in the Southeast Asian region by providing turnkey solution and creating franchising arrangement with different regional operators to jump-start its satellite multimedia business.

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