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taiwan market analysis presentation.pptx
- 1. India Taiwan Equity Fund (Anopen ended equity scheme following Tiwan focused theme)
- 2. Taiwan Overview MSCI EM CountryWeights, Dec 2021 Market Cap of Taiwan Stock Exchange (since 1962, USD 2.03 trillion) 2020 Nominal GDP: US$ 669 bn 2020 Per Capita GDP: US$28,383 Population: 23,375,314 Appreciation of New Taiwan Dollar vs INR 10 years avg : 4.5% 2nd Largest Country Weight in MSCI EM Index 3.99 % 12.45 % 12.81% 16.09 % 22.23 % 32.41 % Brazil India South korea Taiwan Other China Source: MSCI, National Statistics Taiwan, World Bank, WFE FOCUS MONTHLY STATISTICS, DGBAS, Bloomberg, compiled by Cathay SITE. As of 2021/12
- 3. TAIEX reflects Taiwan’sdominance in Semiconductor Market Information Technology, 58.2% Financials, 12.1% Materials, 8.2% Industrials, 8.0% Consumer Discretionary, 5.5% Communication Services, 2.7% TAIEX Sector Weights Health Care, 0.4% Utilities, 0.1% Real Estate, 1.2% Energy, 1.6% Consumer Staples, 2.0% Source: Bloomberg, compiled by Cathay SITE. As of 2021/12
- 4. Worldwide Semiconductor marketcontinues to grow.. Global Semiconductor Market Size (US$BN) 422 476 422 466 21.90% 12.80% -11.30% 10.40% -100% -50% 0% 50% 100% 0 400 800 1,200 1,600 2017 2018 2019 2020 Global Semiconductor Market (LHS , Billion Dollars) YoY (RHS , %) Communication and Internet Manufacturing IC Foundry IC Design, Packaging & Testing PCB HPC Thermal Module Server IoT Tablet Laptop 5G AI Source: Goldman Sachs, Gartner, SEMI, EMDS, compiled by Cathay SITE IoT: Internet of Things, AI: Artificial Intelligence, HPC: High performance computing, PCB: Printed circuit board, IC: Integrated circuit EMS, Computers & Peripheral Equipment Manufacturing Semiconductors are the brains of modern electronics, enabling advances in healthcare, communications, computing, defense, transportation, clean energy, and technologies of the future such as AI, quantum computing, and advanced wireless networks. Semiconductors are engines of Digital Transformation
- 5. Taiwan - KeyBeneficiary of booming global demand -10% -5% 0% 5% 10 % 15 % 20% 25% 500 - 1,000 1,500 2,000 2,500 3,000 3,500 2020 2015 2016 2017 2018 2019 Total Production Value of Taiwan 's Semiconductor Industry (LHS , Billion NT dollars) YoY (RHS , %) The Production Value of Taiwan’s Semiconductor Industry NT$3.2 Trillion ( appx. US$115 Billion) Source: ITRI, compiled by Cathay SITE
- 6. Taiwan has aWell-established Semiconductor Supply Chain EDA & CORE IP EQUIPMENT & TOOL MATERIAL DESIGN BACK END ASSEMBLY & TEST FRONT END WAFER FABRICATION Logic: advanced nodes (<10nm) Logic: mature nodes (<=10nm) Memory Taiwan Dominated #1 and #2 in every semiconductor sub-sectors MANUFACTURING Source: “Strengthen the Global Semiconductor Supply Chain in an Uncertain Era” by BCG and Semiconductor Industry Association, April 2021
- 7. Taiwan dominates theFoundry Market Note: Securities mentioned herein are for informational purposes only and should not be interpreted as recommendation to buy or sell any security. Investors should carefully consider the investment objectives and risks. Source: KGI, TrendForce, compiled by Cathay SITE. As of 2021/12 Much of Taiwan’s dominance can be attributed to Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest foundry that counts major technology firms as its clients Semiconductor Contract Manufacturers by Market Share 2021 Q3 Ranking of Global Top 10 Foundries by Revenue South Korea, 12% China, 17% Japan, 4% Singapore/Malaysia, 5% Europe Middle East Africa, 7% United States, 4% (Million USD) Rank Company 2021 Q3 Revenue Market Share 1 TSMC 14,884 53% 2 Samsung 4,810 17% 3 UMC 2,042 7% Taiwan, 52% 4 GF 1,705 6% 5 SMIC 1,415 5% 6 Huahong Group 799 3% 7 PSMC 525 2% 8 VIS 426 2% 9 Tower 387 1% 10 DB HiTek 283 1%
- 8. Taiwan leads inIC Design and Packaging Taiwan’s semiconductor industry holds a leading market share in IC foundry, packaging and testing services, and is second only to the US in terms of design services and broader market share. 2021Q3 Ranking of Global Top 10 OSAT Companies by Revenue 2021Q3 Ranking of Global Top 10 IC Design Companies by Revenue OSAT: Outsourced Semiconductor Assembly and Testing Note: Securities mentioned herein are for informational purposes only and should not be interpreted as recommendation to buy or sell any security. Investors should carefully consider the investment objectives and risks. Source: TrendForce, compiled by Cathay SITE. As of 2021/12 Rank 1 Company ASE 2021Q3 Revenue (Million USD) 2,148 YoY 41 % 2 Amkor 1,681 24% 3 JCET 1,252 28% 4 SPIL 1,036 16% 5 PTI 802 24% 6 TFME 636 60% 7 TSHT 502 58% 8 KYEC 323 29% 9 ChipMOS 257 33% 1 0 Chipbond 255 30% Rank 1 Company Qualcomm 2021Q3 Revenue (Million USD) 7,733 YoY 56% 2 Nvidia 6,612 55% 3 Broadcom 5,430 17% 4 MediaTek 4,703 43% 5 AMD 4,313 54% 6 Novatek 1,376 84% 7 Marvell 1,166 57% 8 Realtek 1,039 37% 9 Xilinx 936 22% 1 0 Himax 421 75%
- 9. Taiwan Equity Markets- Strong Earnings & Attractive Valuations Note: 1 . Indices mentioned herein are for information only. Past performance of each index is no guarantee of current or future results. 2. The above survey only top 500 companies listed on TWSE by market capitalization Source: Cmoney, Bloomberg, compiled by Cathay SITE. As of 2021/12 The strong exports drove the corporate profits and grew by 74% in 2021. Taiwan's stock prices have progressed in line with an improved earnings outlook. The 12-month forward price/earnings ratio for the Taiwan exchange was 13.8, lower than the historical average over the past decade. 73.50% 47.00% 44.00% 195.00% A l l E l e c t r o n i c s S t o c k s F i n a n c i a l & I n s u r a n c e N o n - E l e c t r o n i c & F i n a n c i a l Taiwan Corporate Profits growth in 2021 10 5 0 15 20 13.8 2012-01 2014-01 2016-01 2018-01 2020-01 TAIEX PE ratio 25
- 10. India Taiwan EquityFund Investment Philosophy Long Term Identify industry leaders from a long term horizon Conviction Tend to hold less than 40 holdings with a high conviction Downside Control Bottom up approach layered with flexible cash position Stewardship ESG integration procedures for responsible investment Investment Consultant – Cathay SITE Cathay Asset Management Platform Across the World: Total AUM: US$209.4 Billion Cathay SITE (Largest asset manager in Taiwan): US$42.81 Bn of client asset under management Founded in 2000 137 Investment Professionals with avg 14 years Industry Experience Note: Investment Strategy is based on the prevailing market conditions and is subject to changes depending on the fund manager’s view of the equity markets Note: The advisory services provided by Cathay shall be non-binding and recommendatory in nature. All final investment decisions in respect of the allocation shall be at the sole and exclusive
- 11. Investment Strategy Investments basedon 3 Ms: Dominant Market Share from successful business model Sizable Market from Mass Demand Sustainable High Margin from superior technology or high entry barrier Multi Cap strategy Mix of growth and value stock Focus on new technology trends <10% investment in a single stock Note: Investment Strategy is based on the prevailing market conditions and is subject to changes depending on the fund manager’s view of the equity markets