China Development Financial Holding Corp (中華開發金控) said yesterday it recently set up a private equity fund that aims to invest in unlisted companies in the local creative industries, in line with a strategy shift to focus on asset management, instead of capital gains, to pursue higher earnings.
The fund has paid-in capital of NT$1.5 billion (US$50.18 million), with the conglomerate’s main subsidiary, China Development Industrial Bank (中華開發工銀), accounting for 40 percent and the government-owned National Development Fund (國發基金) chipping in about 20 percent, China Development Industrial Bank chief investment executive David Chow (周大任) said.
Other investors include firms in the technology, tourism and logistics sectors, which have provided 50 percent of the capital and may supply the other half in the next 12 to 18 months, Chow said.
The fund was set up as China Development Financial is seeking to cut its dependence on investments of its own capital, because the strategy has been blamed for the company’s low returns on equities and a lack of recurrent income, Chow said.
The new fund, which still needs regulatory approval, is part of the company’s plan to change strategy, after rising labor costs in China squeezed the profits of technology firms, while China’s economic reforms suggest huge business opportunities for service providers, Chow said.
The fund is targeting a return of 30 percent and is seeking to create value for Taiwanese vendors in skincare products, travel agencies, restaurants and the entertainment business, among other partners, Chow said.
Ideal targets should have the ability and share the ambition to expand in China because the local market is too small, he said.
Separately, the Financial Supervisory Commission yesterday approved plans by China Construction Bank Corp (中國建設銀行) to upgrade its representative office in Taiwan to a branch.
The Chinese lender set up its representative office in April 2011 and it has qualified for the upgrade after meeting the one-year requirement, the commission said in a statement.
The Chinese bank is the world’s sixth largest in terms of tier-one capital and it occupies 12th place by measure of its assets, the commission said.
The bank’s capital adequacy ratio rose to 14.32 percent last year from 13.68 percent in 2011, helped by a 40 billion yuan (US$6.44 billion) bond issue.
At the weekend, the bank, one of China’s top four lenders, reported that its net profits rose 14.1 percent year-on-year to 193.2 billion yuan last year, up from 169.3 billion yuan in 2011 on growth in net interest income.
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is