We are pleased that our campaign has been covered by the Commercial Times in an article titled, TECO Board Re-Election.
Read the article here.
English Translation:
TECO Board Re-Election: Yu-Ren (Eugene) Huang Proposes Vision, Urges Focus on Motor Business
TECO will undergo a board re-election on the 24th, and the Yu-Ren (Eugene) Huang faction has put forward the “Future TECO” vision to garner shareholder support. Huang pointed out that TECO’s growth in recent years has been driven by the intelligence energy business unit. Engaging in a large volume of low-margin, high-risk construction projects is not an optimal choice. The electric vehicle business, focused only on smaller markets such as light commercial vehicles and buses, has resulted in a total shareholder return rate that is lower than industry peers and has driven foreign investors away. Huang believes that TECO should focus on its core motor business.
The “Future TECO” page emphasizes the need for a board with innovative skills and experience. TECO has been expanding into high-expenditure, high-risk new businesses, causing concerns over its random expansion. This series of unrelated vertical industry expansions and inappropriate diversification has diluted TECO’s core strengths. There is a need to refocus investments on core businesses that can provide long-term competitive advantages.
TECO’s major competitors are already rushing down this path. This requires TECO to focus on the key growth areas, avoidance of distraction, investment in R&D, and exploration of new partnerships. This is also the main reason why Yu-Ren (Eugene) Huang’s camp has nominated their candidate for re-election.
In recent years, TECO’s intelligence energy business has grown significantly, including major construction projects like the Taoyuan Airport Terminal 3. In 2018, construction projects accounted for only 6.7% of total revenue, but last year, they grew to 16.1%. However, the profit margin for intelligence energy ranges only from 4.2% to 5.9%, making it a suboptimal choice for shareholders.
Moreover, TECO’s electric vehicle (EV) strategy is focused on light commercial vehicles and electric buses, which serves a significantly smaller end-market than EV cars. In the EV car market, TECO has made almost no real progress.
Three years ago, TECO’s management team set a target to increase revenue by NT$ 20 billion. However, there is still a gap to reach this goal. From the perspective of total shareholder return, TECO’s return over the past year was 36.8%, and 100.4% over the past three years, significantly lower than the industry peers in Taiwan, which have achieved 110% and 296.4%, respectively. The recent outflow of foreign investor shareholders, many of whom remain shareholders of other Taiwanese companies, highlight issues within TECO.