Knowing Taiwan’s economic structure, you will read how people enjoyed their “La Dolce Vita” (sweet life) in the relatively hard-working export driven Asian countries. Comparing to the rest of the Asia countries, Taiwanese spent 10% of their money on recreation & culture. Even though it was nothing when we compared the export volume of Taiwanese’ consumer electronics as of total GDP or housing expenditure when looking at the consumer wallet share. We should never underestimate the potential for such an area of growth. In this commentary, I want to eliminate the discussion of Export electronics, Real property, food and transportation as the electronic is more to do with the Europe and China market. After analysis of China and Hong Kong, I believe we have enough of China. And for Real property, it has more to do with the income of the general public, therefore I treat it like a lagging indicators of the people’s wealth; and for the food and transportation industries, it has a lot to do with the commodity price hike in the past year, even though we have experienced some cooling in the 1H 2011. What should be valuable is the sectors less likely in the spot light, right?
Recreation and culture as the leading sector
TV
Since 2010 Q1, the expenditure on recreation & culture industry have been showing a growing trend at around 7% Y-o-Y. For an investors, what are the investment thesis for these industries? It would be the resultant of Taiwan’s “Creative Taiwan” and China’s 5-year plan on boosting its culture industry. Sorry that I have to include back China in our vision. The appetite of China for entertainment content is new. When 1.4 billion people go online for entertainment like watching TVs or going to the internet, do you think China has enough content to feed them? Seeing now the singers and tv programme on the youtube equivalent of China – Tudou.com, you will find the Taiwanese comedy and entertainment programs appearing in the top 5 list. Taiwan had a population of 2.3m vs 1,400m China population, no need to do the math, count the number of digits to know the impact. With the inherently strong local consumer market and giant export market, I see the growth potential of Taiwan’s entertainment content provider.
Online Gaming
In another sub-sector of the recreation & culture: internet content or gaming, Chinese companies also see the potential of Taiwan. In recent years, there is news of acquisition by Chinese firms (e.g. InterServ International). Again, the cultural proximity of Taiwanese and Mainland Chinese were so close that it would make acquisition by both sides sensible. For more development in this sector, we are yet to see more to come.
Fed Watch
Taiwan-Entertaining China
Knowing Taiwan’s economic structure, you will read how people enjoyed their “La Dolce Vita” (sweet life) in the relatively hard-working export driven Asian countries. Comparing to the rest of the Asia countries, Taiwanese spent 10% of their money on recreation & culture. Even though it was nothing when we compared the export volume of Taiwanese’ consumer electronics as of total GDP or housing expenditure when looking at the consumer wallet share. We should never underestimate the potential for such an area of growth. In this commentary, I want to eliminate the discussion of Export electronics, Real property, food and transportation as the electronic is more to do with the Europe and China market. After analysis of China and Hong Kong, I believe we have enough of China. And for Real property, it has more to do with the income of the general public, therefore I treat it like a lagging indicators of the people’s wealth; and for the food and transportation industries, it has a lot to do with the commodity price hike in the past year, even though we have experienced some cooling in the 1H 2011. What should be valuable is the sectors less likely in the spot light, right?
Recreation and culture as the leading sector
TV
Since 2010 Q1, the expenditure on recreation & culture industry have been showing a growing trend at around 7% Y-o-Y. For an investors, what are the investment thesis for these industries? It would be the resultant of Taiwan’s “Creative Taiwan” and China’s 5-year plan on boosting its culture industry. Sorry that I have to include back China in our vision. The appetite of China for entertainment content is new. When 1.4 billion people go online for entertainment like watching TVs or going to the internet, do you think China has enough content to feed them? Seeing now the singers and tv programme on the youtube equivalent of China – Tudou.com, you will find the Taiwanese comedy and entertainment programs appearing in the top 5 list. Taiwan had a population of 2.3m vs 1,400m China population, no need to do the math, count the number of digits to know the impact. With the inherently strong local consumer market and giant export market, I see the growth potential of Taiwan’s entertainment content provider.
Online Gaming
In another sub-sector of the recreation & culture: internet content or gaming, Chinese companies also see the potential of Taiwan. In recent years, there is news of acquisition by Chinese firms (e.g. InterServ International). Again, the cultural proximity of Taiwanese and Mainland Chinese were so close that it would make acquisition by both sides sensible. For more development in this sector, we are yet to see more to come.
About APAC-ian
APAC-ian is an analyst on the ground of Asia, he contributed through data-driven analysis. Loyal to the facts.