While most of the world is holding its breath for the long-awaited global economic recovery this year, APT Satellite Holdings shareholders may have to wait longer for its share price drivers to get moving. APT, which closed at HK$2.80 on Friday, had a dismal year last year. The firm recently announced a 45 per cent slide in net profit, hit by sluggish demand for transponder leasing and rising taxes. In this miserable market for technology companies, the results are perhaps unsurprising. Even in the face of a global turnaround in economic fortunes, many analysts still believe the company will, at best, tread water this year. 'On the whole, you can't see much growth for the China market,' said Benjamin Tam of Dao Heng Securities, who saw little reason to change his 'hold' recommendation on the company after the results. APT derives about 70 per cent of its sales from China, according to ICEA Securities. The company has problems beyond the mainland as well. Apstar-V, built by United States firm Space Systems/Loral to replace the ageing Apstar-1, is still awaiting an export licence. The US Government has proved a key sticking point in trying to export APT's satellite and having it launched by a Chinese Long March rocket. 'They are still applying for it and . . . they'll get it probably by mid-year without much difficulty,' Mr Tam said. 'The major hurdle will be trying to launch it on a Chinese rocket.' The licensing issue has forced APT's hand in its financing calendar. According to ABN Amro, the delays in granting the export licence have meant that APT has been forced to bring forward the manufacture of a back-up satellite and speed up its capital expenditure (capex) schedule. 'We would like to see a resolution to the export licence problems in the next few months so that earnings visibility can be improved,' ABN Amro said. Capex for the next three years - which APT estimates at $1.4 billion, $1.4 billion and $690 million - could hit the company's relatively stable share price as well. While APT has closely hugged the $3 level for most of the year, analysts fear this is only because of the company's net cash position, which could be wiped out by the cost of the back-up satellite. 'Why the share price has been very stable is because of the cash value of the company,' said Worldsec International's Bertrand Chui, who maintained his 'sell' recommendation on the company following its results. 'The problem is they'll have to spend more on replacement satellites . . . and they cost US$230 million each, so they will wipe out the cash balance of the company and will take on debt.' Mr Chui said he saw profits this year falling a further 44 per cent. Not all analysts are as bearish. ABN Amro, for example, finds a very compelling reason to buy APT. The launch of China Satellite Communications in December last year raised hopes that consolidation of the mainland industry could be on the cards and that APT could benefit from an asset injection in the process. Market speculation in recent months has centred on the fate of China Telecommunications Broadcast Satellite, which owns 16 per cent of APT. Part of the reasoning behind ABN Amro's 'buy' recommendation was that it expected an announcement on the issue by the year-end. Other analysts say APT's complicated ownership structure will need to be worked out before an asset injection can proceed. 'I don't believe in the [asset injection] story as its shareholding structure is so complicated - there are four to five major shareholders, each not holding more than 24 per cent, and the principals are competitors with each other so there's a conflict of interest issue which will be very difficult to solve,' Mr Chui said. Analysts are split on APT's long-term performance. An economic recovery would certainly help although Asia Satellite Telecommunications Holdings, APT's larger and more regionally diversified rival, is expected to benefit first. It does not help that APT, valued at about 16 times historical earnings, is more expensive than its competitor. Industry restructuring would be a big help too - in terms of reducing overcapacity and asset injections.