碩士 / 國立成功大學 / 高階管理碩士在職專班(EMBA) / 104 / SUMMARY
After 1980s, Taiwan experienced a significant elevation in both NTD value and hourly wage and many Taiwanese businessmen began to venture in foreign market to look for lower labor cost in order to remain competitive on global stage. The aims of entering foreign market included reducing operation cost, pursuing higher profit promote brand recognition and expanding global markets. In the past two decades many Taiwanese businesses have set up foreign branches and investments and moved capital oversea and such trend still continues to develop even today.
After the rise of Chinese economy and its rapid development in infrastructure, with its vast market, bountiful natural resource and low labor cost, it has naturally become an ideal place for Taiwanese businesspeople to invest and expand market. The most ideal place for foreign investment in China is the more economically liberal Hong Kong and this research chose one known motor vehicle manufacturing company in Taiwan whose branch in Vietnam advanced in Hong Kong and was listed on Hong Kong stock exchange as subject to our case study.
INTRODUCTION
Foxconn International Holdings Limited was listed on Hong Kong Stock Exchange in 2005 with the share price of 3.88 Hong Kong Dollar. In 2006, it entered Hang Seng Index Stocks jointly with Sang Send Company limited and the combined value of the company exceeded 200 billion HK dollar. At the time Taiwanese businesses entering Hong Kong stock market was a popular trend and many of those businesses were listed on both Taiwan and HK stock exchange markets in order to take advantages of Hong Kong’s status as a global financial center and capital raising. Taiwanese companies first entered Hong Kong stock market in early 1990s and the number of joining companies began to boom from year 2003. However, what are the major reasons Taiwanese businesses wanting to be listed on Hong Kong stock exchange markets and what’s behind the strength and attractiveness of Hong Kong stock markets? This research will investigate the background and motivation behind Taiwan businesses venturing in Hong Kong and other oversea companies.
MATERIALS AND METHODS
This research chose a Taiwanese motor vehicle manufacturing firm, which has stock listed on Taiwan stock exchange, and entered Hong Kong stock exchange markets with its subsidiary company in Vietnam in order to comprehensively study the development and operational conditions of companies in Taiwan entering Hong Kong. This research will conduct its study through basic stock information of the company, in-depth interview and the researcher’s personal experience in related fields and seek to provide a practical reference for manufacturing companies in Taiwan which have intention to enter stock exchange market in Hong Kong.
RESULTS AND DISCUSSION
Since the stock market in Singapore is relatively inflexible and the profit ratio is lower than its Asian counterparts, many Taiwan businesses have withdrawn their investment in Singapore stock market or are planning to do so. For a manufacturing company which has subsidiaries in Vietnam that decided to venture Hong Kong stock markets, several reasons are behind such a decision: (1) The headquarter has two factories in China and Hong Kong offers high quality employs and stock market in proximity; (2) Since the headquarter is based in Taiwan, for decision makers Hong Kong, which people also speak Mandarin Chinese, is both physically and culturally closer to Taiwan than to Singapore. (3) Manufacturing sectors in Taiwan traditionally lacks managers that are fluent in English and the English speaking market condition in Singapore has become a less attractive option once the route to Hong Kong was available; and (4) The superb trade volume and dynamics of stock markets in Hong Kong provide hope for profit. The trend of entering Hong Kong stock market exists across all different industrial sectors, from textile to IT, why are those companies trying so hard to enter Hong Kong even though the capital requirement for entering Hong Kong stock market is high and its trade volume and profit ratio, while being attractive, sometimes still lags behind Taiwan? One major reason may be that many Taiwanese companies are facing the need of expanding their factories in China but do not want to deal with the 40% investment cap set by the Chinese government, therefore investing in Hong Kong has become a good method to avoid the investment cap. There are also other concerns such as lack of legal protections and corruptions in Mainland China that encourage companies Taiwan to first invest in Hong Kong market before moving into China directly.
CONCLUSION
After the company in this case study successfully entered Hong Kong stock exchange market, it has undergone internal power struggles over ownership, in conjunction with decline in revenue and major shakeups in management level, the company has demonstrated an unstable financial statement; and the annual market entry fee of 10 million HK dollar also added extra burden to the already precarious finance, hence the current stock price per share of the company is not attractive; yet if we review the company from the perspective of its initial goals upon the time the company entered Hong Kong, this company can still be counted as an example of successful entry. Also, this company issued Taiwan Depositary Receipt in 2009 to cooperate with the state strategy of encouraging oversea companies to reinvest Taiwan, hence overall speaking, this company is still one of the successful examples of foreign stock market entry.
| Identifer | oai:union.ndltd.org:TW/104NCKU5457049 |
| Date | January 2016 |
| Creators | Jung-ErhChou, 周容而 |
| Contributors | Ming-Long Wang, 王明隆 |
| Source Sets | National Digital Library of Theses and Dissertations in Taiwan |
| Language | zh-TW |
| Detected Language | English |
| Type | 學位論文 ; thesis |
| Format | 91 |
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