Chunghwa Telecom Co (中華電信) shares were only slightly affected by an escalation in the US-China trade spat yesterday, as they were supported by a news report that the company plans to invest NT$12 billion (US$398 million) to build a science park in Taoyuan in collaboration with the local government.
US President Donald Trump on Monday threatened to impose a 10 percent tariff on US$200 billion worth of Chinese goods, prompting a swift warning from Beijing of retaliation, sending Asian markets into a tailspin yesterday.
The shares of the nation’s biggest telecom fell 0.46 percent to NT$109, but they still outperformed the TAIEX, which dropped 1.65 percent amid fears of a full-blown trade war between the world’s two biggest economies.
The science park project is one of the company’s three major investment plans scheduled for this year, the Chinese-language Commercial Times reported.
The company is to begin the construction of the park’s first phase by the end of this year on a 3.8 hectare plot provided by the Taoyuan City Government, the report said.
The park would offer rental office space primarily to start-up companies, it said, citing Chunghwa Telecom president Sheih Chi-mau (謝繼茂).
However, the NT$12 billion investment was only a media estimate and pure speculation, the company said in a filing with the Taiwan Stock Exchange.
Chunghwa Telecom in April formed a joint venture called Taoyuan Asia Silicon Valley Innovation Co Ltd (桃園矽創新) with the city government through its subsidiary Light Era Development Co (光世代建設開發公司).
The joint venture has an initial capital of NT$12.5 million, according to the company’s registration document filed with the Ministry of Economic Affairs.
Light Era owns a 60 percent stake in the venture, while Taoyuan Aerotropolis Corp (桃園航空城), fully owned by the city government, holds the remaining 40 percent, company documents showed.
As part of the company’s efforts to seek new growth drivers, Chunghwa Telecom plans to expand its business reach to Web-only banking services, given the company’s 10.4 million mobile users and 4.5 million broadband subscribers, Sheih said.
Expanding into the Web-only banking sector would help boost the usage of the company’s mobile payment and financial technology services, he said.
The company aims to vie for a license to run the new banking services by forming partnerships with local financial services providers, he added.
The Financial Supervisory Commission plans to issue only two Web-only banking licenses in its first round of approvals.
Non-financial companies can have up to a 50 percent stake in a Web-only bank, while the other half must be owned either by a conventional bank or a financial holding company, the commission said.
Chunghwa Telecom also plans to invest in a social housing project, Sheih said.
The company is to give priority to its employees and young people who want to buy or rent the units.
Additional reporting by Reuters
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