China Development Financial Holding Corp (中華開發金控), the nation’s worst-performing financial services company in terms of earnings last year, aims to strengthen its asset management business rather than chase capital gains to boost profitability and economic scale, top executives said yesterday.
The investment banking-centric group set a goal of an annual return of between 10 percent and 15 percent of its equity mainly through aggressive expansion in China, Paul Yang (楊文鈞) told an investor conference.
“China Development Financial has mapped out a new business model and it will shift its focus away from capital gains to the asset management business,” Yang said.
The company posted NT$1.56 million (US$52.89 million) in net profit last year, or earnings per share of NT$0.14, Taiwan Stock Exchange data showed.
Yang attributed the poor performance to heavy exposure to technology firms in the solar energy, flat panel and LED sectors.
As the crowded Taiwanese banking sector squeezes profits, China Development Financial is looking for growth by actively tapping the Chinese market this year. The group is the only Taiwanese financial services firm that has obtained regulatory approval to establish a private equity fund and management company in China, executive vice president David Chow (周大任) said.
“We plan to partner with a Chinese state enterprise to set up a yuan private equity fund in northern China and we expect to secure a cooperation agreement in the first half of the year,” Chow said.
A day earlier, the firm’s banking subsidiary, China Development Industrial Bank (中華開發工銀), inked a cooperation pact with Shanghai Lujiazui Financial Holdings (上海陸家嘴金融發展) to establish a private equity fund valued at 2 billion yuan (US$318 million) in eastern China, Chow said.
The lender signed a cooperation agreement with Fujian Electronics & Information (福建電子集團) last year to establish a fund of the same size in southern China, he added.
On the corporate banking side, the group plans to partner with 10 leading Chinese lenders to increase its business and enhance risk management, executive vice president Eddie Wang (王幼章) said.
“We have secured cooperation pacts with seven major Chinese banks and we will add three more soon,” Wang said.
China Development Financial also aims to enter China’s capital leasing market, with its first leasing subsidiary in Kunshan scheduled to start operations next month or in April, Wang said.
“We plan to open 15 branches within five years” to meet the needs of Chinese customers, a venture that will generate higher interest income than in Taiwan given the broader interest rate spread in China, he said.
On the securities side, Grand Cathay Securities Corp (大華證券) plans to set up a representative office in Fuzhou and to buy a 25 percent stake in Fujian Haixia Stock Equity Exchange, said Hsu Daw-yi (許道義), chairman of the group’s brokerage unit.
The brokerage set up a representative office in Shanghai in 2002 and it signed a cooperation agreement with a futures firm in Wuxi, Jiangsu Province, in August last year.
China Development shares closed up 1.41 percent at NT$10.05 yesterday. The company’s shares have risen 17.27 percent this year, outpacing the financial index’s 11 percent rise and the TAIEX’s 13.19 percent gain on the back of its investment in Facebook, the US social networking service provider.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) founder Morris Chang (張忠謀) yesterday said that Intel Corp would find itself in the same predicament as it did four years ago if its board does not come up with a core business strategy. Chang made the remarks in response to reporters’ questions about the ailing US chipmaker, once an archrival of TSMC, during a news conference in Taipei for the launch of the second volume of his autobiography. Intel unexpectedly announced the immediate retirement of former chief executive officer Pat Gelsinger last week, ending his nearly four-year tenure and ending his attempts to revive the
Taiwan would remain in the same international network for carrying out cross-border payments and would not be marginalized on the world stage, despite jostling among international powers, central bank Governor Yang Chin-long (楊金龍) said yesterday. Yang made the remarks during a speech at an annual event organized by Financial Information Service Co (財金資訊), which oversees Taiwan’s banking, payment and settlement systems. “The US dollar will remain the world’s major cross-border payment tool, given its high liquidity, legality and safe-haven status,” Yang said. Russia is pushing for a new cross-border payment system and highlighted the issue during a BRICS summit in October. The existing system
Convenience store operator Lawson Inc has registered trademarks in Taiwan, sparking rumors that the Japanese chain is to enter the local market. The company on Aug. 30 filed trademarks for the names Lawson and Lawson Station, according to publicly available information from the Ministry of Economic Affairs’ Intellectual Property Office. The product categories on the application include some of Lawson’s top-selling items for use in the convenience store market. The discovery has led to speculation online that the popular Japanese chain is to enter the Taiwanese market. However, some pointed out that it might be a preemptive application to avoid others from co-opting the
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to grow its revenue by about 25 percent to a new record high next year, driven by robust demand for advanced technologies used in artificial intelligence (AI) applications and crypto mining, International Data Corp (IDC) said yesterday. That would see TSMC secure a 67 percent share of the world’s foundry market next year, from 64 percent this year, IDC senior semiconductor research manager Galen Zeng (曾冠瑋) predicted. In the broader foundry definition, TSMC would see its market share rise to 36 percent next year from 33 percent this year, he said. To address concerns
RSS