Wed, Jun 12, 2019 - Page 12 News List

Listed firms’ returns on investment in China fall

By Kao Shih-ching  /  Staff reporter

The nation’s listed companies’ combined return on investment in China dropped 7 percent year-on-year in the first quarter of this year, due to headwinds facing the semiconductor industry, while their investments in other regions fell by 24 percent over the period due to intense competition, the Financial Supervisory Commission (FSC) said yesterday.

A total of 1,196 listed companies, or 74.9 percent of the companies in the local bourse and the Taipei Exchange, invested in China, down by four from the end of last year, the commission said.

Their combined return on investment declined to NT$36.5 billion (US$1.16 billion), the lowest in five years, with some companies’ semiconductor business in China reporting declining profits due to sluggish demand for consumer communications products, Securities and Futures Bureau Deputy Director Sam Chang (張振山) told a news conference in Taipei.

Although analysts have said that a US-China trade dispute has affected companies in China, Chang said that he did not think trade tensions directly affected the Taiwanese companies’ return on investment there.

“The decline should be attributed to lower demand for smart mobiles, and we still expect the figure to rebound in the third or fourth quarter, as they are high seasons,” Chang said.

New investment in China totaled NT$4.1 billion, with computer and electronics component industries making up the majority, Chang said.

The total return on investment in other regions by the nation’s 1,273 listed companies fell for the first time in four years, totaling NT$77.6 billion, the data showed.

That was a drop of NT$25 billion from the same period last year, Chang said, attributing the decline to the increasing prices of raw materials, fierce price competition and inventory problems.

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