News / TIPC cashes in with Yang Ming share sale after learning investment lesson

Lee Hsien Yi Photo: TIPC

Yang Ming’s third-largest shareholder, state-owned Taiwan International Ports Corporation (TIPC), is to retain at least 150 million shares in the liner operator.

TIPC announced on Sunday that, after selling 1.5m Yang Ming shares for $53.1m, it would retain 176.9m shares, bringing its stake to just under 5.5%.

The Ministry of Transportation and Communications and the National Development Fund are Yang Ming’s larger shareholders, with stakes of 13.39% and 13.17%, respectively.

TIPC chairman Lee Hsien Yi said it had acquired the Yang Ming stocks for around $135m in 2017 as part of a state-sponsored effort to recapitalise the liner operator after years of losses. However, the recent spike in freight rates has seen Yang Ming’s share price appreciate and TIPC said it had made some money from selling some of its shares.

Mr Lee said TIPC could have held on to all its Yang Ming shares and received dividends, as the liner industry enjoyed a second straight year of record earnings, but decided to profit from the rising stock price.

Last year, TIPC sold 119.5m Yang Ming shares in four batches for around $97m, a figure deemed by market observers to be too low, and the port owner was criticised for not waiting for the share price to rise further.

The latest sale of Yang Ming stocks by TIPC saw the share price at TW$124 ($4.26), nearly triple the price of a year ago.

Mr Lee said TIPC’s investment in Yang Ming was its first foray into the stock market and it was “inexperienced in stock speculation”, adding that the organisation had learned from the experience, timing the latest stock sale for after the share price had risen to “an attractive level”.

As a state-owned company, TIPC must hand over 33% of its profits to the National Treasury Administration, 27% to the Port Development Fund, 16.5% to municipal authorities and keep 23.5%.