Formosa Plastics Group’s (FPG, 台塑集團) four major subsidiaries saw their capitalization shrink by double-digit percentage points last week as worries over the spread of COVID-19 led to a massive sell-off in local equities, a Taiwan Stock Exchange (TWSE) tally showed.
The combined market capitalization of Formosa Plastics Corp (台灣塑膠), Nan Ya Plastics Corp (南亞塑膠), Formosa Petrochemical Corp (台塑石化) and Formosa Chemicals & Fibre Corp (台灣化學纖維) totaled NT$1.897 trillion (US$62.6 billion) on Friday, down 10.43 percent from NT$2.118 trillion a week earlier.
Last week, the TAIEX fell 894.78 points, or 8.83 percent, with market capitalization of all TWSE-listed stocks totaling NT$28.09 trillion at the end of the week, down 8.12 percent from NT$30.8 trillion the previous week.
While the companies that form the nation’s largest industrial group have maintained dividend payout ratios of as high as 75 percent this year to reward shareholders, they might still face weak market sentiment for their equities.
That is because, apart from COVID-19 concerns, prices for polyethylene, ethylene glycol and polyvinyl chloride products made at naphtha-based and ethane-based facilities have been declining this year amid sluggish demand, analysts said.
“We believe that global demand for petrochemical products has now reached its lowest point. Although individual companies have lowered their cracker utilization rates by 10 to 20 percentage points ... these efforts should barely be sufficient to offset the decrease in demand,” NH Investment & Securities Co Seoul-based analysts Yusik Hwang and Han Kim said in a note on Friday.
Nan Ya, which manufactures plastic and fiber products, as well as electronic materials and petrochemical products, on Thursday said that its board of directors had approved a proposal to distribute a cash dividend of NT$2.2 per common share — the lowest in six years — with a payout ratio of 75.6 percent based on last year’s earnings per share of NT$2.91.
Nan Ya is the last of the four units to report a low dividend due to last year’s weak performance.
Formosa Plastics’ board on Tuesday approved a cash dividend of NT$4.4 per share, the lowest since 2016, but the highest among the four firms.
Based on last year’s earnings per share of NT$5.86, the flagship company of the industrial conglomerate and the nation’s largest maker of polyvinyl chloride resins would offer a payout ratio of 75.09 percent for its dividend distribution.
Formosa Petrochemical’s board on March 9 approved a cash dividend of NT$2.9 per share, the lowest in five years. With last year’s earnings per share of NT$3.86, the refiner’s payout ratio is 75.13 percent.
The board of Formosa Chemicals, one of the main aromatics and styrenics suppliers in Asia, on March 13 approved a cash dividend of NT$3.8 per share, suggesting a payout ratio of 73.93 percent compared with last year’s earnings per share of NT$5.14.
Overall, total cash dividend distribution would be NT$95.35 billion for the four FPG subsidiaries this year, a decrease of 39.88 percent from the NT$158.6 billion they distributed last year.
Analysts said that petrochemical stocks are expected to face strong headwinds in the next few months, including sluggish demand and falling oil prices, which might prompt companies to revise downward their earnings outlooks for this year.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained