Sinbon Electronics (MV $417m): Leading Cable-Connector Solutions Provider with the “Innovator’s DNA” in MAGIC Applications

Sinbon Electronics (TWSE: 3023) is Taiwan’s leading connector and cable solutions provider for transmitting signals and power for wide-ranging high-value-add end-applications and hence products have to be highly reliable, resulting in long-term customer loyalty and representing high market entry barrier. Sinbon’s product segment include: Medical Healthcare, Automotive, Green Energy, Industrial, Communications, with the acronym MAGIC as the organizing philosophy and each business unit operating autonomously. Customers are mainly global leaders. Top client is GE using Sinbon’s products in medical healthcare and green energy applications, contributing 5.1% of sales in FY14. 70% of GE’s medical equipment already uses Sinbon’s cables. Top ten clients account for <30% of sales and a well-diversified quality MNC customer base reduces the operational risk from dependence from having a single key client. New high-growth products include robotics cable products used in automated warehouses which have seen an increase in construction due to the rise in online shopping and Sinbon’s customers include Amazon and Alibaba. Sinbon’s production facilities are in Taiwan, China (Jiangsu, Dongguan and Beijing). Sinbon was founded in 1989 by chairman Joseph Wang in 1989, formerly the sales manager for AMP-Tyco (the world’s #1 connector supplier).

1) What Makes It a Wide-Moat Business?

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