Chailease Holding Co Ltd (中租控股) expects its expanded presence in Southeast Asia to sustain earnings growth this year, chairman Albert Chen (陳鳳龍) said last week.
Highlighting its focus on the region, the nation’s top leasing services provider this year began reporting on its new operations in Vietnam and Malaysia along with its more established business in Thailand.
The two markets are expected to provide stable profit contribution and the company has established a presence in five of 10 ASEAN countries, Chen told investors at an earnings conference in Taipei.
In addition, the company’s new operations in the Philippines are to begin in the next two to three months, Chen said.
The company is also studying the feasibility of expanding to Laos, Indonesia and Myanmar in the next one to two years, he added.
The company’s ASEAN operations last year saw net profit rise 7 percent annually to NT$758 million (US$24.8 million) and revenue grow 6 percent to NT$3.02 billion, the company’s latest financial statements released on Monday last week showed.
Its loan book for the region expanded 11 percent annually to NT$34.04 billion, with Chailease saying it aims for a 10 percent increase in lending there this year.
Overall, the company’s net income last year rose 6 percent to NT$7.24 billion, with total revenue rising 3 percent annually to NT$36.83 billion.
Its total loan portfolio last year rose 9 percent annually to NT$249.19 billion, primarily due to a 14 percent rise in Taiwan to NT$138.46 billion, while China saw lending slip 2 percent to NT$73.1 billion due to a weakening yuan, the company said.
While return on assets (ROA) last year declined slightly from 2.8 percent in 2015 to 2.7 percent, the firm maintained its return on equity (ROE) at 19 percent, Chailease said.
ROE and ROA are the two most frequently used benchmarks when comparing profitability among financial institutions.
As investors expect further improvement in Chailease’s asset quality to enhance its profitability, shares have rallied 30.67 percent so far this year, outranking the broader market’s 7.08 percent increase over the period, Taiwan Stock Exchange data showed.
Chailease shares closed at NT$72 in Taipei trading on Friday.
Capital Investment Management Corp (群益投顧) gave a positive outlook on Chailease’s business growth this year, as a recovery in capital demand takes hold at the firm’s main markets in Taiwan and China.
Taiwan, which contributed 62 percent to the company’s total profit last year, is projected to maintain a steady 8 to 10 percent annual expansion in loans this year as the nation’s economic growth momentum recovers, Capital said in a report on Wednesday last week.
China, representing 26 percent of Chailease’s profit last year, is expected to see loans rise by 7 to 9 percent following increasing capital demand from small and medium-sized businesses, the report said.
The Chinese market would also be helped by expectations that the yuan’s strength would be more stable this year, the report said.
Chailease’s Chinese operations would also see lower delinquency due to a more careful selection of borrowers, leading to a 5 percent reduction in general provisions beginning next quarter, Capital said.
RESTRUCTURING: Taichung and Taoyuan profited most from local firms moving back high-end manufacturing amid the US-China decoupling of trade ties, the ministry said The government’s “Invest in Taiwan” initiative might this year see NT$627.1 billion (US$21.7 billion) of investment pledges realized, with several firms raising stakes and two dropouts due to customer losses, Minister of Economic Affairs (MOEA) Wang Mei-hua (王美花) said yesterday. Wang made the statement at the monthly meeting of the Third Wednesday Club, a local trade group featuring the top 100 firms of each business sector. Since early last year, the government has launched three programs intended to help local companies grapple with US-China trade rows and the COVID-19 pandemic, mainly through moving production lines back to Taiwan. Thus far, the ministry
JOBS AT RISK? Most Cathay Dragon routes are to be operated by Cathay Pacific or a subsidiary, but it was unclear how Taiwanese workers would be affected Cathay Pacific Airways Ltd (國泰航空) yesterday said it is planning new flight services for Taiwan as it announced a corporate restructuring that included the shutdown of its regional subsidiary, Cathay Dragon (國泰港龍), and could lead to job cuts in Taiwan. Cathay Pacific said the shutdown means that the one round-trip service between Taichung and Hong Kong per day and seven round-trip services between Kaohsiung and Hong Kong operated by Cathay Dragon prior to the COVID-19 pandemic would be terminated. “The parent company is planning a new schedule between Taiwan and Hong Kong,” Cathay Pacific assistant manager for corporate communications Moses Hou (侯恩錫)
OVERHEATED MARKET?: The gauge would be designed to provide more reliable information than private-sector data, and help improve policymaking, the council said The National Development Council (NDC) is considering creating a business climate index on Taiwan’s property market, allowing policymakers to better monitor market movements and intervene if necessary, NDC Minister Kung Ming-hsin (龔明鑫) said yesterday. Kung made the remarks at a meeting of the legislature’s Economic Committee where lawmakers from across party lines voiced concerns about housing price hikes driven by capital repatriation. Kung said that the council is assessing the possibility of creating an index designed to provide more accountable and transparent information than data provided by private-sector market analysts, and could help improve policymaking. The council would compile a report on
STOCK MARKETS TAIEX closes slightly higher The TAIEX closed slightly higher yesterday as market sentiment remained cautious over the Nov. 3 US presidential election. Contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) was again the anchor stabilizing the broader market, preventing the main board from falling into negative territory at the end of the session, dealers said. The TAIEX closed up 14.88 points, or 0.12 percent, at 12,877.25, on turnover of NT$167.982 billion (US$5.81 billion). TSMC, the most heavily weighted stock on the local market, rose 0.44 percent after fluctuating between NT$451 and NT$456. The semiconductor subindex and the bellwether electronics sector