【TEJ Finance Research Institute】2023 Taiwan’s Top 100 Group Corporations Performance
According to TEJ Group Observer data, in 2022, Taiwan’s technology group corporations continued to grow, while traditional industries declined the most.
Preface
According to TEJ Group Observer, the top 100 group corporations in Taiwan, ranked by total assets in 2022, saw their overall assets and revenue scale reach new highs. However, amidst a global economic shift from prosperity to decline, the overall profitability of these top 100 group corporations experienced a significant decline of 20% compared to the previous year, leading to a 2% decrease in net worth. This marks the first such decline in nearly a decade.
Furthermore, TEJ classifies the top 100 group corporations into financial group corporations, technology group corporations, and traditional industries group corporations. In 2022, it was observed that while technology group corporations continued to show growth in assets, revenue, profits, and net worth, traditional industries group corporations and financial group corporations saw declines in profitability and net worth. In addition to these findings, this article provides an overview of the trends in assets, revenue, and profitability of the top 100 group corporations in Taiwan over the past decade. It also highlights some of the prominent companies within this group, offering insights into the growth of these corporate giants over the past ten years.
Keywords: GCRI, Group Corporation, Taiwan’s Companies
Guidelines
📍Overview of the top 100 Group Corp.
📍Who Owns The Most Assets?
📍Who Earns The Most Revenue?
📍Evaluation of Technology Group Corporation
📍How to Effectively Get Taiwan’s Group Corp. Data?
Overview of the top 100 Group Corp.
Continued Growth in Assets and Revenue
The overall assets and revenue of Taiwan’s top 100 group corporations for the year 2022 continued to grow compared to 2021, as shown in Figure 1. The total asset size has reached 144 trillion NTD, representing a 6% growth compared to 2021 and marking the fourth consecutive year of growth. When we look at the core industry categories within these group corporations, financial group corporations continue to dominate with a substantial 72% share of the total assets, while technology and traditional group corporations evenly split the remaining 28%.
In terms of revenue analysis, as depicted in Figure 2, the overall revenue of Taiwan’s top 100 group corporations in 2022 reached 37 trillion NTD, marking a 9% YoY increase. This growth can be primarily attributed to the post-pandemic economic recovery and the effects of geopolitical shifts in outsourcing trends. Revenue has continued to grow for two consecutive years since 2021.
Regarding the composition, there have been no significant changes, with technology group corporations maintaining the largest share at approximately 60%, followed by traditional ones at 23%, and financial ones at 17%.
Profits and Net Worth Show Signs of Decline
In 2022, Taiwan’s top 100 group corporations saw growth in assets and revenue, but faced profitability challenges due to factors like the Russo-Ukraine war, rising inflation, and global economic slowdown. Traditional industries suffered from declining profit margins as raw material prices fell, and the financial industry faced asset price drops from interest rate hikes. Only the electronics sector thrived due to component shortages.
However, the technology sector’s growth wasn’t enough to offset declines in financial and traditional industries, resulting in an overall 19% drop in operating profit compared to 2021. Technology’s profit share rose to 65%, while traditional industries and finance saw their shares decrease significantly. This decline in profitability led to a 2% drop in the net worth of the top 100 group corporations, the first in nearly a decade. While the decrease is not substantial, it marks the first such decline in nearly a decade and warrants careful consideration.
As mentioned above, due to the diverse strengths of the core businesses within the top 100 group corporations, comparing their operational performance requires more meaningful analysis than just an overall ranking. Therefore, conducting comparisons based on the respective industry categories of each group provides more insightful results.
Who Owns The Most Assets?
LinYuan Group (G2882) Takes The First Place
According to data compiled from the TEJ Group Observer, the combined assets of the top 100 group corporations in 2022 amounted to 144 trillion NTD. The largest among them was the LinYuan Group (G2882), with total assets of 12.1 trillion NTD, earning the title of the asset leader among the top 100 group corporations.
The LinYuan Group’s core businesses primarily revolve around the financial sector, including entities like Cathay Life Insurance (8.2 trillion) and Cathay United Bank (3.9 trillion). Their group’s asset scale has consistently ranked first over the past decade.
Ranked second was the Fubon Group (10.8 trillion). Although also a financial conglomerate, it comprises subsidiaries such as Fubon Life Insurance, Taipei Fubon Bank, and later, the merger of Jih Sun Bank. However, as of the end of 2022, its asset scale remained smaller than that of the Cathay Group.
Due to the financial industry’s inherent characteristics of managing public funds and acting as intermediaries, it typically boasts larger average assets compared to other sectors. Consequently, financial group corporation represent a substantial 70% of the total assets among the top 100 group corporations. Remarkably, among the top 10 ranked group corporations (Figure Six), 8 of them operate within the financial sector.
Two non-financial conglomerates, Hon Hai Group (G2317) and TSMC Group (G2330), both in the technology sector, also secured top 10 positions, ranking 6th and 7th, respectively. The largest traditional industries conglomerate in terms of assets was Taiwan Power Group (G9963), ranking 20th with total assets of 2.4 trillion NTD.
The group corporation with the smallest asset size among the top 100 group corporations is the Foxlink Group (G2392), with assets totaling 107 billion NTD. In 2022, it managed to enter the top 100 group corporations, displacing the WinFoundry_ Chen Ching-Tsai Group (G3105A), while the other members remained unchanged. This highlights the prominent trend in Taiwan where larger group tend to maintain their positions.
Who Earns The Most Revenue?
Hon Hai Group (G2317) Takes The First Place
According to TEJ Group Observer, in 2022, the total revenue of Taiwan’s top 100 group corporations amounted to 37 trillion NTD. However, there was a significant disparity in the size of these revenues, with the largest being 7.3 trillion NTD, a median value of 132 billion NTD, and the smallest at only 4 billion NTD.
As shown in Figure Seven, the group with the highest revenue was the Hon Hai Group (G2317), which achieved a revenue of 7.3 trillion NTD in 2022, marking an 8% YoY increase. Over the past decade, Hon Hai Group has consistently held the top position in terms of revenue among the top 100 group corporations, establishing itself as an unrivaled leader. The second-largest was the TSMC Group (G2330), benefiting from IC shortages and price increases, with a 2022 revenue of 2.3 trillion NTD, representing an impressive 42% YoY growth. However, there is still a significant gap between their revenue and that of the Hon Hai Group.
Due to the strong competitiveness of the domestic EMS (Electronic Manufacturing Services) industry, which almost monopolizes the assembly outsourcing for global electronics products, technology group corporation dominate the top 10 in revenue ranking. Among these, six belong to technology ones, including Hon Hai Group, Kinpo Electronics (G2312), and Pegatron Group (G4938). Traditional industries ones occupy two positions in the top 10, with Formosa Plastics Group (G1301) and CPC Corporation (G1328) ranking 4th and 9th, respectively. Financial group corporations hold two seats as well, represented by the Lin Yuan and Fubon Group.
Evaluation of Technology Group Corporation
Hon Hai Group Largest in Size, TSMC Group Leads in Profits
As mentioned earlier, although technology group corporations have smaller asset sizes compared to financial ones, they constitute only 29 out of the top 100 group corporations. However, in terms of revenue (22 trillion NTD) and profits (2.1 trillion NTD), technology group corporations hold a substantial share of over 60%, clearly making them a significant force within the top 100 group corporations. Therefore, the following analysis will focus on the performance of technology group.
In terms of asset size, technology conglomerates have a total of 21 trillion NTD in assets, with an average of 739 billion NTD. The largest among them is Hon Hai Group (G2317) with 5.2 trillion NTD in assets, and the median value is 426 billion NTD (Delta Electronics Group G2308). The smallest is 107 billion NTD, belonging to Foxlink Group.
The top 5 technology conglomerates, in terms of assets, are Hon Hai Group, TSMC Group, United Microelectronics Group (G2303), Largan Precision Group (G2311), and Quanta Group (G2382), all of which operate in the EMS and IC industries. Among them, Hon Hai Group stands out with 5.2 trillion NTD in assets and 7.3 trillion NTD in revenue, ranking first in the technology conglomerate category. However, its operating profit of 182 billion NTD is second only to TSMC Group, which ranks 2nd. TSMC Group has 5.1 trillion NTD in assets and 2.3 trillion NTD in revenue, lower than Hon Hai Group, but it excels with a remarkable operating profit of 1.1 trillion NTD, far surpassing the 2nd ranked Hon Hai Group. TSMC Group’s profitability is impressive, with an operating margin of 49%, making it the undisputed leader.
Ranked 3rd is United Microelectronics Group, with significantly smaller asset and revenue sizes (903 billion NTD and 545 billion NTD, respectively) compared to the top two group corporations. However, its operating profit of 179 billion NTD is competitive with Hon Hai Group.
Overall, in 2022, technology group corporations had an average revenue of 767 billion NTD, with the top 6 all surpassing the trillion NTD mark. The smallest was Catcher Group (G2474), which recently exited the Apple supply chain, with a 2022 group revenue of only 28 billion NTD, marking a significant decline from its previous multi-billion NTD scale.
In terms of profitability, the overall performance was quite impressive, with an average operating profit of 75 billion NTD, compared to 60 billion NTD in 2021, representing a 25% YoY increase. Only AUO Group (G2352) recorded a loss of 12 billion NTD, while the rest of the technology conglomerates remained profitable.
Table: Top 100 Group Corp. Ranking_ By Asset. (Billions in NTD, %)
How to Effectively Get Taiwan’s Group Corp. Data?
TEJ Group Observer Provides Comprehensive Information for Taiwan Group Corporations and Group Quota Management
As people know, group corporations in Taiwan, such as Formosa Group, Cathay Lin Yuan Group, Hon Hai Group, and others, often encompass a wide range of companies. Many people might initially turn to official websites to understand the core companies within these groups. However, the information may not always be complete, and for smaller enterprises, finding such data can be challenging. How can one categorize multiple companies under a single conglomerate, and what distinguishes between a group members and affiliated companies? In Taiwan, there are no regulatory requirements for these definitions, and different interpretations by users can lead to collaboration and management challenges.
TEJ Group Observer addresses this issue by establishing a consistent definition of group corporations for publicly traded enterprises in Taiwan and their affiliated small and medium-sized companies. This system helps identify the scope and scale of group members, maintains detailed records of companies (including and reasons for their inclusion or exit from the group), and further evaluates credit risk levels within the group. This information serves as a crucial resource for cooperative assessments and management decisions. It can be helpful while we’re making decision on investing and crediting.
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