Easing restrictions on China-bound investments would help boost the global competitiveness of Taiwanese companies, but an overly aggressive expansion could also undermine their credit quality, Taiwan Ratings Corp (中華信評), the local arm of Standard & Poor’s Ratings Service, warned yesterday.
“If [president-elect Ma Ying-jeou’s (馬英九)] policies materialize, the credit profiles of companies in Taiwan’s transportation, real estate/REIT [real estate investment trust], cement, petrochemicals and technology sectors would be the most heavily affected,” Taiwan Ratings credit analyst Daniel Hsiao (蕭黎明) wrote in a report released yesterday.
“But for many companies, the opportunities that open up from greater integration with China could far outweigh the costs involved,” he said.
In the report titled “Can Taiwan’s industries regain their global edge if more barriers with China are lifted?” Hsiao and three other credit analysts detailed why closer trade ties with China may offer mixed blessings to the future of local companies.
Hsiao referred to direct flights as a “double-edged sword.” Their implementation would help generate new revenue stream for companies like China Airlines Ltd (中華航空) and EVA Airways Corp (長榮航空), but such an opening-up would also mean less income from their currently lucrative Taipei-Hong Kong and Taipei-Macau routes.
Allowing Chinese to directly invest in Taiwan’s commercial properties could re-energize the local real estate market, but it could also drive up prices, making them too costly for new REITs to enter the market, the report said.
Furthermore, allowing Chinese to buy residential property remains a controversial issue for the new government — and “a housing bubble could emerge if the policy is not fully implemented,” the report said.
The local property market’s opening up to China could also benefit the local cement sector. However, excessive inventory buildup as a result of speculation over future expansion opportunities in Taiwan could backfire if the market does not grow as much as expected, the report said.
In the high-tech industries, Taiwan Ratings said that semiconductor foundry, assembly and testing would be the deregulation’s greatest beneficiaries, whose financial positions would not be significantly affected given their already strong balance sheets.
However, if the government continued to prevent technology companies from applying leading-edge technology in China, their competitiveness could weaken and their share of the Chinese market would decline, the report said, adding that even if the barriers were lifted, the impact in the first 12 months would be limited.
Manufacturers of thin film transistor liquid-crystal-display would see the least benefits from the proposed deregulation, but easing investment restrictions could allow them more flexibility to operate near their clients and counter threat from emerging Chinese competitors, the report said .
“Greater [economic] integration [between Taiwan and China] won’t be a panacea, but it could lead to the recovery of Taiwanese industries’ global competitive edge,” the report said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the