Shift in focus rings in better times for First Pacific

A SHIFT in focus towards telecommunications in Southeast Asia is expected to bring stability in earnings to First Pacific Company.

Earnings growth has fallen from 40 per cent to 20 per cent over the past five years.

With the narrowing of its strong focus on telecommunications and recurring property agency and building management, its earnings prospects are likely to be easier to predict.

Pacific Link, the company's mobile cellular telephone network operator, is one of seven companies bidding to win a second network licence.

Pacific Link's string of high-growth years will come to a temporary halt this year due to an industry-wide slowdown. Looking ahead, a flat growth in 1993 should be followed by the resumption of a more pedestrian but still impressive growth of about 20 to25 per cent per annum.

Its sister company, Pacific Telelink offers paging and CT2 services, both of which are in the start-up phase.

This enables Pacific Link to offer an integrated paging or cellular package. So far, no other operator is offering such a package.

About 50,000 Pacific Link subscribers also carry pagers.

As Telelink's paging operations are a recent addition to the market and are marketed in conjunction with CT2, there is tremendous potential to boost volumes with an integrated cellular or paging package.

It is believed the package will make Pacific Link's cellular product significantly more attractive.

Smart Information is 40 per cent owned by First Pacific Company. Early this year, Smart was awarded a licence to operate a nationwide cellular network in the Philippines, covering the urban areas of Manila, Cebu, and Davao.

Smart has also won approval for a nationwide digital microwave backbone which will connect Manila, Cebu and Davao in its network. It will extend beyond cellular in the long-term and it could prove to be the hidden gem.

The company's property arm, First Pacific Davies (FPD), is beginning to look at the property management market in China. FPD is managing the two million square foot World Trade Centre in Guangzhou.

The downside of the stock is limited.

Brokerage Nomura Hong Kong forecasts the company will register a 31.5 per cent profit growth to $606 million in 1993 and a 11.8 per cent growth to $705 million in 1994.