Tai­wan to ben­e­fit from Bei­jing ini­tia­tive: in­vestors


As China's "One Belt, One Road" strat­egy and its Asian In­fra­struc­ture In­vest­ment Bank ini­tia­tive gather steam, Tai­wanese com­pa­nies are likely to ben­e­fit from the im­mense surge in con­struc­tion projects an­tic­i­pated through­out Asia, ac­cord­ing to Tai­wan-based in­sti­tu­tional in­vestors.

The Asia Devel­op­ment Bank has es­ti­mated that an­nual de­mand for cap­i­tal to fund ba­sic in­fra­struc­ture in­vest­ment among gov­ern­ments in Asia will reach US$730 bil­lion by 2020.

China In­ter­na­tional Cap­i­tal Corp., the largest in­vest­ment bank­ing and re­search firm in China, said it an­tic­i­pates that Bei­jing will pour more than US$1.65 tril­lion into its "one belt, one road" strat- egy over the next decade, much of which will flow to neigh­bor­ing na­tions in Asia.

Mean­while, the prospects of Tai­wanese com­pa­nies Asia Vi­tal Com­po­nents Co. ( ), and Power Mate Tech­nol­ogy Co. ( ) have risen in the eyes of in­vestors as they are deemed to be com­pa­nies well-po­si­tioned to reap re­wards as the Bei­jing-led ini­tia­tives take shape. Power Mate Tech­nol­ogy Co. ( ), a power sup­ply com­pany that in 2010 se­cured a role in China's rail­road equip­ment sup­ply chain af­ter its elec­tronic equip­ment prod­ucts re­ceived EN 50155 stan­dard cer­ti­fi­ca­tion for rail­way ap­pli­ca­tions.

Since its found­ing, Power Mate's prod­ucts have been used in a num­ber of de­mand­ing industrial ap­pli­ca­tions in­clud­ing med­i­cal, weaponry, so­lar power and au­to­mo­biles. The com­pany is an orig­i­nal de­sign man­u­fac­turer, and mar­kets prod­ucts un­der the brand name P-Duke.

In­sti­tu­tional in­vestors said that Power Mate's pres­ence in the industrial power sup­ply niche mar­ket guar­an­tees the com­pany stel­lar profit mar­gins of around 50 per­cent and steady de­mand from clients. Industrial com­po­nents must meet strin­gent stan­dards and re­quire a lengthy cer­ti­fi­ca­tion process, so clients are less likely to switch sup­pli­ers once a part­ner­ship has been es­tab­lished, the in­sti­tu­tional in­vestors said.

Tai­wan's Asia Vi­tal Com­po­nents Co. ( ), a ther­mal so­lu­tion provider, in 2011 ac­quired a 45-per­cent stake in a sub­sidiary com­pany formed with China's China South Lo­co­mo­tive & Rolling Stock Corp.

Lo­cal in­sti­tu­tional in­vestors are ex­pect­ing the com­pany to ben­e­fit from ex­pected growth in de­mand for high-mar­gin rail­way heat dis­si­pa­tion and elec­tri­cal prod­ucts in­clud­ing power re­sisters, wa­ter-cooled trans­form­ers and rack­able con­nec­tors.

In ad­di­tion to ex­pected wind­falls in the fu­ture, Asia Vi­tal Com­po­nents Co.'s com­puter server busi­ness has also been pick­ing up and is ex­pected to bring im­proved mar­gins for the com­pany, the in­sti­tu­tional in­vestors said.

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