E.Sun Financial Holding Co’s (玉山金控) decision to sell its securities investment trust subsidiary to Schroders PLC for NT$523 million (US$17.23 million), or NT$15.75 a share, is wise, although there are concerns over whether the smaller company can compete in the market and that may worry investors, analysts said yesterday.
“Such a clear-cut decision is wise if it stops potential losses and the subsidiary isn’t making much of a contribution,” Shen Chung-hua (沈中華), a finance professor at National Taiwan University, said via telephone yesterday.
There should be little impact on E.Sun’s operations since its securities unit would be able to manage the other related businesses, he said.
On Thursday, E.Sun and Schroders said the acquisition would be completed by October. E.Sun may also evaluate the possibility of forming a strategic partnership with Schroders, local Chinese-language media quoted company chief strategy officer Joseph Huang (黃男州) as saying yesterday.
He said the investment trust unit, which manages seven funds with a total size of NT$10.4 billion, accounted for only NT$348 billion, or 1 percent, of the parent company’s assets.
E.Sun shares dropped 5.76 percent lower to close at NT$13.9 yesterday amid concerns that the company’s asset value would fall to NT$796.6 billion after the sale, leaving it with a lower asset base and therefore at more of a disadvantage to the competition in the domestic market than before.
“It’s a pretty good idea to liquidate the unit for some cash,” a securities analyst said, speaking on condition of anonymity yesterday.
The analyst, however, expressed concern over the mid-size financial service provider’s management performance as investors have raised doubts about its ability to compete with other domestic banking giants in the future amid uncertainties and the selling pressure facing financial stocks both domestically and globally.
Susan Chu (朱素徵), a director at Taiwan Ratings Corp (中華信評), the local arm of Standard & Poor’s Ratings Services, said that she believed “the deal is too small to have any impact or risk on the parent company” or its core banking unit.
And the credit rating company, which tracks E.Sun Commercial Bank (玉山銀行), has no plan to revise its rating on the bank, she said.
Shen, nevertheless, still expressed concern over the size of E.Sun, which he said would eventually be vulnerable as competition heats up.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
TikTok abounds with viral videos accusing prestigious brands of secretly manufacturing luxury goods in China so they can be sold at cut prices. However, while these “revelations” are spurious, behind them lurks a well-oiled machine for selling counterfeit goods that is making the most of the confusion surrounding trade tariffs. Chinese content creators who portray themselves as workers or subcontractors in the luxury goods business claim that Beijing has lifted confidentiality clauses on local subcontractors as a way to respond to the huge hike in customs duties imposed on China by US President Donald Trump. They say this Chinese decision, of which Agence