Taiwanese companies are on two different paths to recovery, with 16 percent seeing their profits ahead of pre-COVID-19 levels this year, while 71 percent do not expect a full recovery until the end of 2022, HSBC Bank (Taiwan) Ltd (匯豐台灣商銀) said yesterday.
That was based on an HSBC Bank PLC Navigator survey of 10,000 companies in 39 markets conducted from Sept. 11 to Oct. 7, including 200 firms in Taiwan.
Companies in the first group are in the electronics sector, with many of them benefiting from increased demand for consumer electronics because of the work-from-home trend and some receiving big and rush orders in the third quarter, HSBC Taiwan senior vice president Stanley Hsiao (蕭仲程) told a media briefing in Taipei.
Photo courtesy of HSBC Bank (Taiwan) Ltd
Sixteen percent was the highest among all markets surveyed, compared with only 8 percent of businesses globally that said they are more profitable than they were before the outbreak, Hsiao said.
However, overbooking could be an issue next year and it is unlikely that electronic firms would continue to maintain high profit growth, he said.
For companies expecting to return to pre-pandemic levels within the next two years, many of them fall in sectors that have been adversely affected by COVID-19, such as tourism, dining or aviation, he said.
They expect to regain profit momentum on the back of increasing demand, as the pandemic eases with the help of vaccines and technological developments, he said.
They have a higher chance of posting growth next year than electronic firms, but it would be a longer path to a full recovery, he said.
Meanwhile, 70 percent of Taiwanese companies plan to increase their investments, higher than the global average of 67 percent and the Asia-Pacific average of 65 percent, the survey showed.
Some are boosting investments because they are upbeat about the future, while others aim to diversify their supply chains by expanding to Southeast Asia to reduce risks, Hsiao said.
“Overall, businesses in Taiwan have performed better than their global peers, not only because the outbreak has been contained in the nation, but also because Taiwan’s technology-centered economy is more resilient,” he said.
For example, New Zealand has also done well in fighting the virus, but only 6 percent of companies expect their profitability to return to pre-COVID-19 levels by the end of this year, as the country’s agriculture and tourism-based economy is reliant on overseas demand, he said.
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