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TCC Shareholders Meeting Approves Shares Allotment and NT$1 Dividends! Nelson Chang: From High Yield to Circular Economy Stock

published: 2022-05-26 9:30

Taiwan Cement (TCC) held a shareholders' meeting today. During the meeting, it passed a profit distribution proposal and distributed a cash dividend of NT$1 and a stock dividend of NT$1. Chairman Nelson Chang said that Taiwan Cement used to be a high-yield stock but now it has become a circular economy stock. Distributed a NT$1 stock dividend this year is investing in the future of TCC and the transformation considers current shareholders and future shareholders.

Nelson Chang said that this year has been the most difficult year for TCC in the past ten years. On the one hand, energy prices have grown exponentially and TCC’s consumption has decreased rapidly, resulting in very strict operating pressure this year but, as long as all the dark clouds are aligned, there will be a silver lining. The sun will always penetrate a ray of light through the gaps in the clouds and subtle light points will bring an optimistic hope for the future.

Nelson Chang pointed out that in the past, TCC was a company that only produced cement. If the demand is good, the market will be good, and the price of cement will be good. However, the world cement market will decline after reaching a plateau period. Therefore, TCC made plans five years ago. In order to face a cement plateau period, all-round development of the enterprise group is planned, that is, the circular economy.

Nelson Chang explained that TCC has begun to transform from a high-yield stock with high dividends to a circular economy concept stock. In the future, TCC's goal is to move towards technology growth stocks, like the electronics and semiconductor industries where cash dividends are not the main reason for market value growth. The distribution of a stock dividend of NT1 this year is investing in the future of TCC and this transformation considers current shareholders and future shareholders.

TCC has invested two-thirds of its profits in ESG in the past two years and has built waste treatment facilities on both sides of the Taiwan Strait, invested in the construction of various green energy projects, and acquired the Italian energy storage company NHOA. This is a complete development ideal and is also a complete blueprint for TCC's commitment to carbon neutrality.

TCC expects, in addition to Ho-Ping Power Company, the total renewable energy power generation in Taiwan in 2025 is expected to reach the RE100 initiative standard. However, TCC is still mainly supplying green power demand for Taiwan's export enterprises. Cement, as well as resource recycling and green energy, will not only focus on the after-tax net profit and cash dividends of TCC in the future but whether growth rate is fast enough.

Taiwan is short of electricity and green electricity in the long run. The government plans for Taiwan's energy transition and renewable energy demand of 27GW by 2025. TCC's green energy plans, including wind power, photovoltaics, geothermal, and ocean temperature differential, are being rolled out in all directions. The company is expected to build more than 500MW by 2025.

TCC believes, in order for green power to be fully and effectively used, the corresponding energy storage demand must reach 20% of green power, that is, at least 5GW of energy storage is required in Taiwan in 2025. Under the global RE100 climate initiative, enterprises that commitment to use 100% renewable energy for electricity consumption is expected to drive the huge demand for industrial green power and energy storage in Taiwan.

TCC's global energy storage capacity is expected to exceed 400MWh by the end of this year and is expected to exceed 2900MWh by 2024. Since TCC acquired Italy's NHOA last year and became the fourth largest energy storage company in the world, NHOA has rapidly launched global energy storage andplanned project sites span 26 countries including Italy, Spain, Greece, Australia, Singapore, Chile and the United States.

Free2Move eSolutions, a subsidiary of NHOA, has built the world's largest V2G equipment site in Italy with a capacity of 30MW, which can utilize 600 electric vehicles to recharge the grid at the same time when power is insufficient. Atlante CO., another subsidiary of NHOA, is located in southern Europe. It has developed rapidly and has built a microgrid using renewable energy and energy storage, making it the largest virtual power plant in southern Europe.

The key to new energy in the future will be batteries. TCC Molie Quantum Energy Corp. has started construction of its super battery factory in Siaogang and is expected to complete construction of the 30,000-ping factory in 15 months at the earliest. It is expected to be put into operation in the first quarter of 2023 with an annual production capacity of 1.8 GWh, ant the long-range battery capacity required to produce about 24,000 electric vehicles a year. E-One Moli Energy Corp., another subsidiary of TCC, will increase total battery production capacity to 3.3GWh by 2024.

(Image: Technews)

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