Asian Dividend Gems: FSP Technology

• While the world is trying to transition to more renewable energies, FSP Technology (Taiwan) could be a beneficiary of reliable power energy supply products.

• FSP Technology's dividend yield averaged 8.1% from 2020 to 2022. The company has a strong balance sheet. Net cash as a percentage of market cap is 40%.

• FSP Technology provides power supply products used for personal computers, industrial power, renewable energy, and batteries. We used Smartkarma's Smart Score Screener system to find Fsp Technology (3015 TT).

Conclusion First

We live in a world where consistent, reliable energy supply is increasingly valued. There are several reasons for this including our lives that are attached to the digital world through smart phones and EVs combined with increased emphasis on using renewable energy sources. The big problem is that while the world is trying to make a smooth transition to the renewable energy sources, the length of this transition period is highly uncertain and the world is already witnessing so many problems with recurring energy outages and lack of reliable energy supplies.

Amid all these issues, there are promising companies such as FSP Technology (Taiwan) that could be major beneficiaries of this transition period to renewable energy sources. FSP Technology provides numerous power supply products used for various purposes including personal computers, industrial power, medical power, and adapters. It also provides PV Inverter, UPS, ESS, and battery chargers. The company's products are used in numerous applications including consumer electronics, rechargeable batteries, industrial, and alternative energy.

FSP Technology is an undervalued stock with consistent high dividends in Taiwan. FSP Technology's dividend yield averaged 8.1% from 2020 to 2022. Estimated dividend yield is 6.7% in 2023. The company has a strong balance sheet. Net cash as a percentage of market cap is 40%. If we annualize 1Q-3Q 2023 figures, this would suggest annual net profit of TWD 816.5 million in 2023. Given that the company has a market cap of TWD 9.7 billion, this would suggest P/E of 12x. The company had equity of TWD 14.2 billion at the end of 3Q 2023 which would suggest P/B of 0.7x.