Overview of Business Strategy for 2024
In 2023, the world entered the post-epidemic era, and countries worked towards economic recovery. However, the Russian-Ukrainian war, driven by geopolitical conflicts, remains unresolved; the Israeli-Palestinian war has resumed; and relations between the United States and China have continued to deteriorate. Inflation has not cooled significantly throughout the year, and both economic and political uncertainties have cast a heavy shadow over global economic recovery.
Relying on its solid operational advantages and resilience, CHEM successfully navigated the challenges of the epidemic, with both revenue and profits showing strong results during the period. For CHEM, 2023 was a year full of challenges. The recovery of domestic and international tourism after the epidemic boosted the parking business. Additionally, the government's active promotion of energy transformation and the Taiwan Power Grid Resilience & Strengthening Plan helped drive strong growth in heavy electrical equipment and green energy-related businesses. As a result, CHEM’s annual revenue reached a record NT$22.145 billion!
However, CHEM was also tested by the Yunbao Case. Fortunately, the management team responded appropriately to the risks, working together with all colleagues to protect the rights and interests of shareholders and minimize the negative impact. Despite the challenges, CHEM was still able to achieve success. The consolidated net profit after tax was NT$1.585 billion, with earnings per share after tax at NT$3.25. The board of directors approved with the cash dividend of NT$3.6 per share for 2023.
Honor and Recognition
Business Week, in cooperation with the National Taiwan University Risk Center team, selected Taiwan's carbon emissions index based on five indicators: carbon productivity, carbon emission growth rate, carbon reduction commitment, management, and Category 3 carbon emission data published by companies in their annual sustainability reports. CHEM was recognized as one of the "Top 100 Competitive Enterprises" for its efforts in the green energy and sustainable industries, continuously promoting energy conservation and carbon reduction. In 2023, CHEM was awarded the title of "Top 100 Carbon Competitiveness High-Quality Enterprises."
CHEM has always upheld its commitment to product and engineering quality and the promotion of green energy and environmental protection. In 2023, CHEM contracted with Taipower Corporation for the "Datan Power Plant Gas-Fired Combined Cycle Power Generation Plan." The project, which includes the "161kV Switchyard Equipment GIS Project" at the Taitan and Linkou Power Plants, effectively utilizes existing switchyard space to enhance by power engineering solution. This not only strengthens the power supply capacity of the grid but also eliminates the lengthy construction time and significant costs associated with building a new switchyard. As a result, CHEM won the Gold Medal Award for Excellence in Facility Design and Construction at the 23rd Public Works Awards. Additionally, CHEM received the Special Contribution Award of the Public Engineering Gold Award for its outstanding performance in public engineering construction over the years (having been recognized for 5, 10, and 15 consecutive years).
The Public Works Gold Medal is regarded as the "Oscar of the Engineering Industry," the highest honor in the field, and serves as a model in public engineering. This recognition is a testament to the company's engineering quality and the greatest honor for the entire CHEM team.
Business Focus
Resilience in the Power Grid Program: Full Launch and Continued Investment for Growth in Revenue and Profits
To comprehensively enhance Taiwan's power grid’s ability to respond to various emergencies and prepare for the net-zero transformation by 2050, Taiwan Electric Power Company launched a ten-year "Resilience in Power Grid Investment Plan" in 2023, with a total funding of NT$564.5 billion. This plan has three main components: promoting decentralized power grid projects (NT$437.9 billion), improving and strengthening power grid projects (NT$125 billion), and enhancing system defense capabilities (NT$1.69 billion). It includes five decentralization projects, three reinforcement projects, and two defense projects, all aimed at ensuring the future electricity needs of Taiwan’s economic development and people's livelihoods.
The power grid consists of power plants, substations, transmission systems, distribution systems, and more. CHEM is a leading manufacturer of gas-insulated switchgear and various power transmission and distribution equipment, as well as green energy projects in Taiwan’s heavy power industry. Leveraging its competitive advantages in line with government power policies, CHEM has performed well in power-related businesses in recent years. Moving forward, CHEM will continue to invest resources to master various engineering equipment projects related to power plant switching plants, offshore wind substations, new energy storage systems, and Taipower distribution substations to drive new business growth.
iCHARGING Creates a Charging Life Cycle for Mobile Demands in Taiwan
As a pioneer in charging services, iCharging relies on CHEM's leading power management technology and DODOHOME's proven parking lot market competitiveness, alongside the growing electric vehicle market in Taiwan. In 2023, iCharging accelerated its electric vehicle charging offerings to the next level!
iCharging implements the "park and charge" concept, with its charging station layout successfully spanning three major areas: highway service areas, cities, and science parks. It is the only charging station operator with the right to operate charging piles in Taiwan's highway service areas. By 2023, iCharging had obtained operating rights for a total of 16 charging stations in highway service areas (Phases I to III of the Highway Bureau of the Ministry of Transport), with 108 charging parking spaces and a 16MW charging network, which will be expanded to 40MW to meet the growing demand for electric vehicles.
In response to the government's green energy policy, iCharging integrates hydrogen power generation with smart grid management. It also introduces high-capacity energy storage systems (BESS) and hydrogen backup power systems at charging stations. The Energy Management System (EMS) smart grid management system further optimizes electricity savings and reduces carbon emissions. By managing power loads through leveling power use and synchronization, the iCharging system releases power during peak hours, reducing the dependence of charging stations on the city's power grid. It is expected to increase the carbon absorption capacity of 709 Daan Forest Parks over eight years, implementing green transportation, energy conservation, and carbon reduction.
Future Development Strategy
Having overcome the difficulties brought by the Yunbao Case, the worst phase of CHEM's journey is behind. Looking ahead to 2024, with steady operational resilience, CHEM is poised to face unpredictable and ever-changing challenges. With its competitive advantages in the power industry and a business philosophy that embraces change and innovation, CHEM is committed to achieving sustainable management goals.
Impact of External Competition, Regulatory Environment, and Overall Operating Environment
- The heavy electrical industry is part of infrastructure and is demand-driven in Taiwan. CHEM currently holds the highest market share in Taiwan and is a leading manufacturer in this sector. CHEM has a complete GIS equipment product line in the heavy electricity industry, along with robust engineering experience and professional capabilities in power generation and grid connection management, significantly reducing the impact of external competition and market fluctuations.
- In recent years, CHEM has actively transformed its business operations, developing groups focused on electric power, system integration, renewable energy, DODOHOME parking management, and China business. This diversification into green energy, services, and other areas has already shown positive results, effectively mitigating the risks of relying on a single industry.
- China Business Transformation and Growth: Through the upgrading of precision machining technology, CHEM has successfully entered the semiconductor and optoelectronic equipment industries, securing orders from major international clients. This expansion has reduced the impact of competition and operating environment risks from a single region.