Taiwan Ratings Corp (中華信評), a local arm of Standard and Poor's rating services, reaffirmed its credit rating on China Development Financial Holding Corp (CDFH, 中華開發金控) after the financial group announced plans to boost its stake in Taiwan International Securities Corp (
Taiwan Ratings reaffirmed its `twA+' and `twA-2' long-term and short-term counterparty credit ratings on China Development Financial with a stable outlook, the ratings services firm said on Monday.
"The planned stake increase is not expected to have a significant impact on the credit profile of the China Development Financial group, which is stronger than that of Taiwan International Secur-ities," the ratings agency said in a statement.
Financial strength
With a net worth of NT$128 billion (US$3.94 billion) and a double leverage ratio of about 109 percent as of the end of September last year, the financial group has sufficient financial strength to absorb Taiwan International Securities, a mid-sized securities firm that has a net worth of about NT$8.2 billion and a brokerage market share of about 1.8 percent at the same time, the statement read.
Meanwhile, Macquarie Securities retained its `outperform' rating on China Development Financial, implying a return exceeding 10 percent, with a target price of NT$13.93, according to the Australian brokerage's report released yesterday.
If the financial holding firm succeeds, this would be the first case of a true hostile takeover among Taiwan's financials. The move is viewed as a test case for Taiwan's regulatory environment and an interesting precedent for other brokers, Macquarie said.
CDFH, which already has a 36.44 percent stake in Taiwan International Securities, said last Friday it would buy as many as 133 million shares of the brokerage through a tender offer of NT$14 apiece from Feb. 19 to March 1.
The purchase would cost China Development about NT$1.86 billion based on the offer price.
Shareholding boost
China Development Financial's shareholding will be diluted to some 27 percent after Taiwan International Securities merges with smaller rivals First Securities Co (
However, the planned stake increase will boost the financial group's shareholding to a maximum of 40 percent in the merged entity, the company said.
To counter the hostile takeover attempt, Taiwan International Securities urged its shareholders not to respond to China Development Financial's offer and put forth the signatures of 1,200 employees against the proposed takeover, the brokerage said in its filing to the Taiwan Stock Exchange on Monday.
Taiwan International Securities formed a strategic alliance last week with Legacy Partners Group of the US to counteract China Development Financial's aggressive bid.
China Development Financial's share price yesterday fell 0.8 percent to NT$12.35 on the Taiwan Stock Exchange. Taiwan International Securities' stock also ended lower, slipping by 0.7 percent to NT$14.05.
Gudeng Precision Industrial Co (家登精密), the sole extreme ultraviolet pod supplier to Taiwan Semiconductor Manufacturing Co (台積電), yesterday said it has trimmed its revenue growth target for this year as US tariffs are likely to depress customer demand and weigh on the whole supply chain. Gudeng’s remarks came after the US on Monday notified 14 countries, including Japan and South Korea, of new tariff rates that are set to take effect on Aug. 1. Taiwan is still negotiating for a rate lower than the 32 percent “reciprocal” tariffs announced by the US in April, which it later postponed to today. The
ELECTRONICS: Strong growth in cloud services and smart consumer electronics offset computing declines, helping the company to maintain sales momentum, Hon Hai said Hon Hai Precision Industry Co (鴻海精密) on Saturday announced that its sales for last month rose 10 percent year-on-year, driven by strong growth in cloud and networking products amid the ongoing artificial intelligence (AI) boom. The company, also known internationally as Foxconn Technology Group (富士康科技集團), reported consolidated sales of NT$540.24 billion (US$18.67 billion) for the month, the highest ever for the period, and a 10.09 percent increase from a year earlier, although it was down 12.26 percent from the previous month. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said its cloud
Video streaming giant Netflix is launching a talent cultivation program in Taiwan aimed at producing high-quality Mandarin content, the company announced in a press release on Thursday. Netflix Chinese language content head Maya Huang (黃怡玫) said that Netflix has long invested in the Taiwanese market, citing the Netflix Fund for Creative Equity launched last year as an example. The fund would continue to dedicate resources to discovering content with the potential to be developed into Chinese-language projects, she added. The financing for the new talent projects seeks to create an ecosystem for content creators and professional development programs, she said. The talent projects
APPRECIATION: The central bank stepped in to stabilize the NT dollar after a surge in foreign institutional investment, triggered by optimism about tariffs and US Fed policy Taiwan’s foreign exchange reserves hit a record high at the end of last month, as the central bank intervened in the currency market to curb the New Taiwan dollar’s appreciation against the US dollar. Foreign exchange reserves increased by US$5.48 billion from May, reaching an all-time high of US$598.43 billion, the central bank said on Friday. While the central bank did not disclose the scale of its intervention, Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民) said that the currency market remained relatively stable until the middle of last month. However, a shift occurred following the US Federal Reserve’s signal of a
RSS