Strong adoption to local and global markets keeps company unfazed by current market conditions
Manila, Philippines– Despite what many consider to be a bear market with the Philippine Stock Exchange index (PSEi) hitting a record low of 6,986 last June due to a global trade war, political uncertainties, inflation rate, and the weakening peso, Cal-Comp Technology (Philippines), Inc. is unfazed.
The company recently filed for a P6.77 billion initial public offering (IPO) with the Securities and Exchange Commission (SEC), which the company will use for facilities expansion, acquisition of new equipment, and research and development. It plans to sell up to 378,071,100 primary common shares, and targets to list before the end of the year.
“We believe in the Philippine economy and we leverage on the current local and global market conditions, instead of running away from them,” New Kinpo Group (NKG) and Cal-Comp Technology CEO Simon Shen said.
Shen pointed out that the weakening peso is not a threat to an export-oriented company like Cal-Comp Technology, but a favorable condition. The lower exchange rate has reduced the company’s costs and enabled it to lower its prices in terms of dollars and become more globally competitive. This has been helping and will continue to help them acquire more orders and revenues, and subsequently increase profits.
“Export is an important component of the gross domestic product (GDP), and we believe that the Philippine government will not let the exchange rate hamper economic growth. Also, our strong relationship with partners makes us flexible in dealing with the peso value,” Shen said.
With regards to the trading war between China and the United States, Shen explained that the newly-imposed tariffs on Chinese goods raised US domestic prices, which has made Cal-Comp Technology’s parent company New Kinpo Group (NKG) cement its expansion position in the Philippines.
“We have received inquiries from some of our customers about manufacturing outside China,” Shen remarked. “Although we have several manufacturing sites in different parts of Southeast Asia, we believe that the Philippines is the best location for a production base at this rate. We considered its close proximity to Taiwan and the solid foundation that we have established in the country. Ultimately, Filipinos’ skills and language capabilities are hard to match.”
Shen also said that the company, which has always been committed to its investors, will be giving decent returns. “We currently have a dividend policy, wherein an annual cash dividend of P0.45, P0.50, and P0.55 per share, respectively, will be paid to shareholders for the first three years after the listing. Thereafter, our general dividend policy will be to pay at least 30% of the company’s net income after tax for the preceding fiscal year,” Shen shared.
Growth in EMS and OEM
The Global Electronics Manufacturing Services (EMS) Market Size, Status and Forecast 2023 published by QY Research in May 2018 suggests that the prospects are good for New Kinpo Group’s EMS and Original Equipment Manufacture (OEM) business.
Globally, the EMS market size is expected to jump from 43165.32 million USD in 2017 to 54985.81 million USD in 2023, with a compounded annual growth rate (CAGR) of 4.12%. The EMS market size in Southeast Asia, which holds a market share of 9.58% in 2017, is expected to jump from 4134.50 million USD in 2017 to 6033.29 million USD in 2023, with CAGR of 6.50%. NKG’s strong presence in Southeast Asia is reflected by its 22.47% market size share in 2017 or equivalent to 929.06 million USD.
Meanwhile, NKG remains one of the major players, ranking in the top ten of the Global EMS market.
Cal-Comp Technology Philippines, a subsidiary of global technology conglomerate New Kinpo Group, is engaged in global electronic manufacturing services and original design manufacturing. It produces multiple product lines including hard disk drives, calculators, smart home appliances and smart beauty products.