Far Eastern New Century Corporation (Stock code: 1402, hereinafter referred to as “FENC” or “the Company”) held its 2024 Annual General Shareholders’ Meeting at the Taipei Hero House auditorium at 9:00 AM on 27th June with Chairman Douglas Tong Hsu presiding. During the meeting, the management team reported the financial results of the Company’s three major business segments – production, investments, and property development, and also directions for its future development.
►Stable Performance in 2023, and Q1 2024 Growth, Fuel Optimism for Future Dividends
Despite the global economic downturn in 2023, FENC maintained stable operations, achieving consolidated revenue of NT$257.2 billion (US$8.3 billion). The net income attributable to the Company’s shareholders increased by 1% from the previous year, reaching NT$8.23 billion (US$264.2 million), with earnings per share (EPS) of NT$1.64 (US¢5.26). Additionally, shareholders approved a cash dividend of NT$1.35 per share (US¢4.33), reflecting a cash dividend yield of 3.8% based on the closing stock price on June 26th. FENC’s consolidated revenue for the first quarter of 2024 rose by 6% to NT$65.4 billion (US$2.1 billion), and the net income attributable to the Company’s shareholders increased by 9% to NT$1.59 billion (US$50.6 million). Optimistic about its future operational performance, the Company plans to keep a high dividend payout ratio.
►Creates Green Business Opportunities and Accelerates AI-powered Transformation
FENC is a global leader in recycled polyester production. In 2023, revenue from green products accounted for over 30% of its production business. To maintain its leadership and promote green transformation in the polyester industry, the Company is actively expanding its recycled PET (rPET) capacity. For example, the new plant in the Philippines commenced commercial operations in 2023. The Kansai plant in Japan and the plant in Vietnam are scheduled to become operational in 2024. The U.S. rPET plant plans to complete its capacity expansion in the first half of 2024. Additionally, the Company is establishing a new green rPET plant in Malacca, Malaysia, which is expected to be operational by the end of 2025.
With the upcoming 2024 Olympics, FENC’s recycled polyester products have gained favor with global sports brands. These products have not only been selected for the jerseys of several national teams but have also driven continuous increases in orders for eco-friendly shoe materials and functional fabrics. Furthermore, its application in food packaging and PET bottles is expected to experience demand increase due to the Olympic buying spree. The combination of high market demand and the Company’s new expanded capacity is expected to push the revenue of green products to a new record high this year.
To advance towards a sustainable future, the Company has established ambitious transformation goals for 2030, which include a 50% reduction in carbon emissions, green products constituting 50% of total production, and green raw materials comprising 50% of sourcing. The Company is diligently working towards achieving net-zero emissions, employing strategies such as enhancing energy efficiency, adopting low-emission fuels and developing renewable energy. FENC continues to harness cutting-edge technologies for a growing range of products, including chemical recycling technology, which is nearing commercialization and poised to capture promising future business opportunities.
The Company has developed a comprehensive digital transformation strategy, integrating AI into production, sales, and administrative management to create intelligent operational models. A dedicated taskforce drives AI adoption within the organization, developing applications such as intelligent production lines, optimal decision making, human-robot collaboration, IoT and edge computing. In 2023, the Company recognized the potential of generative AI to drive unprecedented technological innovation. We developed AI-managed application scenarios using proprietary technologies, including personal assistants, corporate platforms, and smart customer service. These advancements not only enhance operational and management efficiency but also foster cross-border collaboration.
Furthermore, in collaboration with two global AI tech giants, the Company introduced Google Gemini and Microsoft Copilot’s AI platforms, leveraging their advanced language models and AI capabilities. Generative AI has rapidly and seamlessly integrated into workflows, enhancing efficiency and strengthening the Company’s competitive advantages through scientific and technological prowess.
►Revitalizes Property Assets to Unlock Value
The Company owns 570,000 pings (1,884,306 m²) of land in Taiwan, primarily concentrated in prime locations in the north. The investment property accounts for nearly 40% of the Company's land holdings, reflecting a significant land value. Current development focuses on two key projects: the Taipei Far Eastern Telecom Park (Tpark) in Banqiao District, New Taipei City, and the Neili property development in Taoyuan City. These projects are expected to generate substantial profits.
Tpark is Taiwan’s first privately developed industrial park dedicated to the information, communication, and digital sectors, and it is also Taiwan’s first LEED Campus-certified industrial park. It houses several R&D buildings leased by world-renowned companies like Google, generating strong rental income. Additionally, the high-end residential building complex Eco Park within Tpark has been fully sold, generating over NT$5.5 billion in revenue. Construction of two more 27-storey residential towers has also commenced to meet the high market demand.
The land rezoning application for the Neili property development in Taoyuan City has been approved by the local government. Once the Ministry of the Interior finalizes processing, this site will be transformed into a thriving multi-purpose zone, encompassing commercial and residential spaces. The Company will continue to revitalize land assets, boosting the area’s economic vitality.
As the demand for plant expansion rises in Taiwan, the value of industrial land has surged. The Company owns substantial prime industrial land, totaling 400,000 pings (1,322,320 m²), in locations such as Kuanyin in Taoyuan, Hsinpu and Hukou in Hsinchu. The Company will implement diverse strategic partnerships to activate these assets and maximize their value.
The Company boasts a diversified and high-quality investment portfolio, primarily featuring outstanding listed companies within the Far Eastern Group, including Far EasTone Telecommunications, Asia Cement, and Far Eastern Department Store. These companies are not only leaders in their respective industries but also have ambitious growth strategies. These investments make up over 40% of FENC’s total assets, generating steady annual dividend income and offering significant potential for value growth. Based on the current stock prices of the Group’s listed companies, the total market value of the shares held by the Company exceeds NT$170 billion (US$5.5 billion), more than double the book value. The potential profits are more than NT$85 billion, indicating a promising future for our investment portfolio.
►Sustainability Performance Wins Universal Acclaim
The Company’s sustainability performance has garnered widespread recognition. In 2023, it won the National Sustainable Development Award on its first attempt, showcasing the Company’s exemplary values. Additionally, it has received the Top 10 Taiwanese Companies Sustainability Model Award, the highest honor of the Taiwan Corporate Sustainability Awards (TCSA), for four consecutive years. Both the Chinese and English versions of its sustainability report have also secured top honors. In 2024, the Company received the First Prize for Comprehensive Performance in ESG and the First Prize for Excellent Program in the low carbon operation category at the CSR & ESG Awards presented by Global Views Monthly for the second year in a row, making it the only company in Taiwan to win two first prizes consecutively. Notably, FENC’s dedication extends beyond Taiwan. The Company ranks in the top 2% of the global chemical industry according to Sustainalytics’ ESG risk rating and scored 4.1 on FTSE Russell’s ESG assessment, placing it among the top five listed companies in Taiwan. The Company’s commitment to ESG excellence has garnered prestigious accolades from leading investment publications. For three consecutive years, competing against other Asian companies in its sector, FENC has been rewarded with the Most Honored Company award by Institutional Investor Magazine and the Best Managed Company by FinanceAsia. It has also been named the Most Outstanding Company for two consecutive years by Asiamoney. These achievements solidify FENC’s position as a role model for sustainable business practices in Taiwan.
