Taiwan Paiho (TWSE: 9938 TT) is the world’s largest touch fastener tape maker (1.3m km/yr, >10% market share) with applications in apparel, shoes, diapers, car seats etc. All top 20 global athletic shoe brands, inc Nike, Adidas, Reebok, Sketchers, UnderArmor are customers and Paiho has forged long-term “spec-in” partnerships with them. Its broad product offering, protected by over 110 patents including Trihook, E-Lock, HookBall, Black Swan Strap, and fast delivery enabled Paiho to command higher prices and maintain steady gross margin of around 30%. Established in 1979, Taiwan Paiho is listed in Jan 2001 and has over 4,800 employees It owns a majority 51.5% stake in China-focused spinoff Paiho Shih (8404 TT, MV $198m) which contributes around 39% to group sales and was listed in 2010. Paiho has a Pan-Asia production network in Taiwan, China (Dongguan, Wuxi), Vietnam, Indonesia with plants located close to its major brand clients to provide rapid delivery and quality service.
What Makes It a Wide-Moat Business?
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About The Author: Koon Boon Kee
Koon Boon is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets.
Starting his career at a boutique hedge fund in Singapore and later, at Korea’s largest mutual fund company, Koon Boon started to make headway into the investment arena. In his early successes, Koon Boon was part of the core investment decision committee which achieved 700% in returns (net of fees), in its flagship Asian fund.
A prolific writer and thought leader, Koon Boon has contributed hundreds of articles to Bamboo Innovator and BeyondProxy, an acclaimed series of subscription-based, research-intensive publications for serious investors; and is Managing Editor of the Moat Report Asia, a research service focused exclusively on highlighting undervalued wide-moat businesses in Asia. He had also presented in top banking and finance conferences in Sydney, Cape Town, HK and Beijing, as well as in the Emerging Value Summit and Wide Moat Investing Summit. His work has been featured in local and international media such as, TEDxWallStreet, Investopia, BeyondProxy, Greatinvestors.tv, Jakarta Post, Straits Times Singapore, TODAY Singapore, Business Times Singapore, as well as a publication in the BoğaziçiJournal.
With the wide occurrences of financial fraud committed by listed firms in China during 2015, Koon Boon went to further his studies, from which he saw a gap in the curriculum for accounting fraud. He went on to pioneer the first-of-its-kind course on Accounting Fraud in Asia, which is now an official course in the SMU curriculum.
Today Koon Boon is the Chief Investment Officer at 8I Holdings Limited, where he is responsible for the sustainable growth and outperformance of listed Asian equities investments in the Hidden Champions Fund.
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