21/08/2014 Asia Business Report

County Londonderry. Now on BBC News all the latest

business news live from Singapore. It is Asia Business Report with Rico

Hizon. The world's biggest listed

winemaker, Treasury Wine Estates, post`s at 20% fall in profit.

Panasonic, branching out in unexpected ways for the electronics

giant. Thanks for joining us of this

addition of Asia Business Report on BBC World News. The world's biggest

listed winemaker and producer of Penfold 's, Lindemans and others, ,

posted a 20% year on here fall in net profit for the 12 months to

June. The company is sought after by two private equity groups but has

been struggling in some markets. Treasury Wine Estates is behind one

of Australia's biggest wines, including Penfold 's, and others

including Lindemans and Rosemount. It is much in demand. Private equity

group KKR is bidding and so is a second, and as yet unnamed

investment house, both set to offer takeover bids of more than $3

billion. Fats in spite of TWE's turbulent year with increased

competition in Australia's home market being just one challenge.

It's been hit by the government imposed austerity measures in China.

The company last year said it expected sales there to triple to

500 million cases per year by 2023. But, the government's anticorruption

drive has slowed to land for higher priced wine `` demand. They are

having a tough time in the US were it has cut shipments because of

excess stock. Last year, it was forced to destroy tens of millions

of dollars worth of wine that it couldn't sell. That's not stopping

private equity firms putting the business squarely in their sights.

Although the interest is conditional and still needs to undergo due

diligence. For its part, TWE's Management has tried to turn the

company around with ongoing restructuring.

Earlier, I spoke with Evan Lucas, market strategist at IG markets in

Melbourne to ask for his take on the company's four year result. If

anything, they are a slightly disappointing `` full year. The net

loss came in at 100 billion dollars. The underlying number is $112

million in profit `` $100 million. As you alluded to it is

disappointing and is coming from the Australian and Asian arm where they

have seen significant slowdown is. How will these disappointing numbers

impact of a bidding war for TWE? That is interesting and I assumed

this might take some heat out of any bidding war if it goes ahead.

Looking at what we can see, the fact that the Asian arm has fallen by

around 7`$10, down about 10% compared with last year, suggest

that maybe $5 20, the offer currently, per share, would be fair

value. It could take the heat off what could have been ramped out of

it and we wait to see what happens from KKR and the other takeover

target in TPG. Briefly, what about China's policies, clamping down on

extravagance? Has this impacted TWE's results are still `` results?

Certainly. They had to see Intercontinental in China stop

selling Penfold 's wine which saw a sharp sales fall at the back end of

the sales you. Evan Lucas from IG markets in Melbourne. In other news,

the US technology giant Hewlett`Packard has boosted profits

with a 1% rise on its third quarter revenues to about 28 billion

dollars. The firm has undergone a global restructuring amidst lower

demand for its core desktop computers. CEO Meg Whitman said her

confidence in the turnaround in the firm was growing stronger. From cars

to groceries, taxi hire service Huber has launched a grocery

delivery service. The facility is available as an option via the

smart`phone application and covers more than 100 items `` Uber. The

products are competitively priced against high street stores and there

is no delivery fee. The taxi service is an experiment and is available in

America for the moment only. While millions own their own

products, Hong Kong`based Liam Summer is not a household name. The

profit numbers out today will be watched by investors here in Asia

and in the US `` Fung. Today's half`year results won't only show

how he has performed, it will be a guide to the health of American

retailers. When they are doing well, they order more. I spoke earlier

with our correspondent to ask what we should expect from the company.

We might be surprised. Most people don't think this will have been the

best six months for Leah Fung. Analysts expect modest growth,

perhaps 1%, or even a decline, due to a variety of factors, chiefly

America's unseasonably cold weather, putting off shoppers from shopping

and also, we have had a number of high`profile anti` Chinese protests

in factories in Vietnam. Both factors delayed shipments to

America, which is expected to turn up in the earnings results.

Traditionally, the second half of the year tends to be much stronger

for retailers. And, companies that source for them. We will have to see

how they get on in the coming months for example, the back`to`school

season, which is when people shot a lot more and of course,

Thanksgiving, Christmas, the holiday season is. `` seasons. We will get

an indication of how they are doing in the second half of the year. For

the first time, Fung can't count on contributions from the brand

management unit, which was spun off into a separate business on the Hong

Kong stock exchange, which contributes quite a lot to the

bottom line, so we will see how they get on without it.

Our correspondent in Hong Kong. You might think of Panasonic as an

electronics giant. Think again. Try it vegetable farmer. The Japanese

brand building its name on television sets and DVD players and

splashing out to smart phones and cameras, is now growing lettuce and

radishes here in Singapore. Our correspondent discovers.

No, it's not a TV or a DVD player, in fact, there is not an electrical

wire inside, it is our letters, a premium Japanese variety, but still

a vegetable, grown by Panasonic. This is Singapore's first licensed

indoor vegetable farm, the temperature, humidity and level of

oxygen, everything, is carefully controlled. There are no pesticides

in the soil and there are special lamps to simulate the rays of the

sun. And, there is one other thing, the plants are played special music

to help them grow. Before entering, you need to put this mask on. Every

plant counts. We treat them like our kids. Like babies. Yes. We give them

tender loving care. For manager Alfred Tan this the factory grows

three different varieties of vegetables right now with the aim of

expanding to 30. But with so much tender loving care, there is a

pricetag to match. How affordable and sustainable is this type of

farming? We are targeting premium crops kind of market and then

definitely, you know, it is definitely affordable by everyone.

If you are in the premium range? That is right. Can you see a time

when this is not just for premium crops? We don't want to rule out the

possibility. More than 90% of the vegetables eaten in Singapore are

imported, so the aim is to try to help the islands become more food

self`sufficient and of course to make money. Panasonic sees big

potential in agribusiness and points to growing populations and

increasing concerns over food safety and quality. They are starting

small, but thinking big. First steps, we will start in Singapore

and then in future we want to expand to other countries in South Asia,

such as Thailand, Indonesia. Panasonic is expert at automated

factory systems and its those skills the company is now transferring to

vegetables. Perhaps one day per brand will be synonymous with

radishes like it is with TVs. Most stock markets in Asia are

rising after US equities ended higher overnight following minutes

from the Federal Reserve's July meeting giving investors reason to

believe the central bank is in no rush to raise interest rates.

Currently, the Nikkei gained 138 points, the Sydney benchmark all

ordinaries benchmark is higher by 38.

points, the Sydney benchmark all ordinaries benchmark is higher You

have been watching Asia Business Report. Thank you for investing your

time with us. Don't forget to follow us on Twitter. I am Rico Hizon.

Goodbye for now. I am Mike Embley in London with the

main headlines this hour: the