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Taiwan's top 50 companies see weaker profits due to pandemic and trade tensions: analysts

Taiwan’s top 50 companies may weaken the corporate cash flow and profitability due to COVID-19 pandemic and US-China trade tensions according to Taiwan Ratings Corp.

Taiwan Ratings director of corporate ratings Raymond Hsu told the press that Taiwan’s largest firms would face diverging fortunes over the coming few quarters before a widespread recovery takes hold after vaccines for COVID-19 become prevalent, likely in the second half of next year.

"For the first time in three years, we made no upward adjustments for local companies, while global trade tensions and the virus outbreak resulted in seven downward adjustments,” Hsu said.

About 30% of companies which includes the transportation sector, CSC Group and Formosa Plastics Group — will have a negative outlook.

Tech firms might recover first as rising investment in working from home, homeschooling and the evolution of telecommunications technologies could give a lift to the credit profiles of the tech sector.

Taiwan Semiconductor Manufacturing Co, the world’s largest contract chip maker, (TSMC) alone would account for more than 30 percent of the 50 companies’ earnings.

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