BEST SMALL CAP COMPANY
Tripod
Choosing a small-cap corporate for Asiamoney’s Taiwan award in 2012 was relatively challenging given the fact that transparency issues continues to plague the sector. However one corporate stood above its minnow rivals – Tripod, the fourth largest manufacturer of printed circuit boards (PCB) in the world.
The company shows promise. It is ranked fourth of 183 companies in Taiwan’s total turnover and second for profitability, listed in the top 10 of the world’s printed circuit factory. Because of this, it has rapidly grown to number one in Taiwan’s PCB Enterprises.
“They are the largest print circuit board in the world and for the last 10 years they delivered about 20% return on equity (ROE) and is very transparent,” says a Taiwan-based equity analyst to Asiamoney. “This is a very competitive segment and in the long-term, they are likely to grow their market share.”
Although Tripod’s consolidated revenue for the third quarter dropped below TWD10 billion (US$344 million), falling below expectations due to lukewarm PC demand, the company estimates that an increase in demand for HDI boards would push up its consolidated revenue to stand at a landmark total of above TWD10 billion this quarter.
In order to meet this demand Tripod will expand capacity at its three plants in Wuxi, China, including additional capacity of 5,000 square metres for module PCBs and 10,000 square metres for HDI boards.
BEST MEDIUM CAP COMPANY
Giant
China is increasingly considered to be the most important growth market for bicycle sales. And Giant Global, Taiwan’s leading bike manufacturer, is well-placed to benefit from this trend.
The company enjoyed sizable revenue growth there during first half of 2012 after it exported more than 68,800 bikes in the first three quarters of the year, a whopping 371% higher than the same period in 2011. As a result Giant’s export revenues soared 329% to US$33.2 million, with an average sales price (ASP) of US$482, according to Taiwan Bicycle Exports’ Association (TBEA) in November.
“I ride a bicycle that is made by Giant and I can tell you it is a very good product,” says a Taipei-based equity analyst to Asiamoney. “And by moving up the value chain, the company’s ASP continues to go up as well, especially with the emergence of new materials like carbon fibre.”
Giant’s domestic market is also thriving, especially given that the Taipei city government’s plan to encourage its people to use bikes to commute to work and as exercise for recreation. In August, the government signed a seven-year operation contract at TWD268 million with Giant to expand its bike sharing programme called ‘YouBike’.
Giant’s consolidated sales for the six months of 2012 totalled TWD26.13 billion, up 14.4% from a year earlier, while the bike maker registered TWD2.02 billion in pretax profit, up 0.9% year-on-year. In the second quarter alone the bike maker posted TWD2.04 in earnings per share, up from TWD1.78 in the first quarter.
BEST LARGE CAP COMPANY
TSMC
Taiwan Semiconductor Manufacturing Company (TSMC) is one of the most important names in the mobile revolution that has overtaken the world over the past decade.
Its status derives from the fact that it is a semiconductor foundry. Founded in Taiwan in 1985 by MIT and Stanford graduate Morris Chang, TSMC literally changed the semiconductor industry. It made possible the existence of companies like Qualcomm and Nvidia – companies that sell chips without their own foundry, commonly known as the fables semiconductor industry. This US$50 billion market relies on a handful of foundry companies like TSMC to produce their semiconductors for them.
While a cyclical business, semiconductor manufacturing has been fabulously successful for TSMC. Now the Taiwan stock exchange’s most weighted stock, the company’s shares rose to TWD96.60. A few days earlier on November 30 its shares were at a record high of TWD98.70, with 74.92 million shares changing hands after several foreign brokerages said the world’s largest contract chip maker was posed for even better things to come.
“You look at all the metrics – either management capabilities, financial performance or industry position – they are the best,” says a Taiwanese-based equity analyst to Asiamoney. “The share price in the last 10-years has reached a record high. The management has a very long-term view and it pays good dividends as well.”
Record-breaking financial figures are also one of the reasons why the company continues to outperform. TSMC reported a record-high monthly net revenue for October at TWD49.28 billion, 15.2% higher than the TWD42.82 billion it made in September. It beat expectations of a downtrend because of an inventory correction.
The revenue figure was also 32.8% higher than the TWD37.25 billion TSMC had reported during October 2011 – offering further testimony that this continuously dynamic company deserves this award.
BEST EXECUTIVE
Morris Chang, chairman and CEO, TSMC
TSMC has gained recognition on the books of many equity analysts in recent years as one of Asia’s top tech stocks. Under the supervision and leadership of chief executive and founder Morris Chang – who secures Asiamoney’s best executive award for Taiwan in 2012 – the foundry’s market share has managed to grow from 31% of the market in 1997 to nearly 50%.
This success is a result of Chang’s deep knowledge of the technology industry.
Shortly after graduating at the Massachusetts Institute of Technology, Chang started a job at Texas Instruments (TI) where he would be the head of one of the production lines for IBM. In 1985, he returned to Taiwan with great credentials to start TSMC, a US$220 million project, half-funded by the Taiwan government.
Chang’s business really took off in the mid-1990s with the explosion of the fabless industry. Companies like Qualcomm, Broadcom and later Nvidia started relying on TSMC for their production. As a result almost 10 years later the foundry had expanded from having a value of US$220 million to enjoying an initial public offering on the New York Stock Exchange that valued it at US$6 billion.
Fast-forward to today, and TSMC is Taiwan’s most valuable company and the world’s second-most valuable chip manufacturer. And while rival Intel has a US$96 billion market cap TSMC is quickly catching up at US$84 billion and rising.
Other high-powered executives have also been following Chang’s footsteps – who said in a letter to employees in November that he is opposed to having employees working overtime frequently. The provision of favourable benefits and bonuses to employees indicates that other industrialists value the effectiveness long-espoused by Chang.
Because of this, TSMC was rated in a recent survey as the best company to work for in Taiwan, according to the results of the survey released on November 28, and will continue to do so under the leadership of Chang himself.
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