DEAR SHAREHOLDERS,
In 2023, the venture capital industry faced challenges despite positive performances in global stock markets. The VC industry experienced a tough year as valuations for many new ventures were significantly revised downward compared to the previous year. This downward trend in valuations indicates a more cautious approach from investors and suggests challenges in funding for startups and early-stage companies.
In 2023, the net profit attributable to shareholders of our company amounted to NT$96.8 million, a marked increase from NT$49.4 million in 2022, primarily driven by gains from divestments. The Net Asset Value per share by the end of 2023 was NT$63.70, compared to NT$65.22 in 2022. Earnings per share reached NT$1.02, compared to NT$0.52 in 2022, after the payout of 2022 cash dividends at NT$2.55 per share. The Board has recommended a dividend of NT$2.55 per share for the financial year ending 31 December 2023.
The venture capital landscape witnessed a degree of caution among investors, leading to more scrutiny of startup valuations and a tendency towards conservative investment strategies. This cautious approach was influenced by factors such as market volatility, geopolitical risk, economic uncertainty in China, and shifts in consumer behavior.
Looking into the future, in certain sectors, such as AI, biotechnology, and renewable energy, startups with innovative technologies and strong growth potential continued to attract significant investor interest.
In my opinions, 2024 is the beginning of the era when artificial intelligence will make technology breakthrough to be explosive. Our team will be committed to investment cases in several directions of AI: edge computing, AI in the field of biological sciences such as drug development, medical big data, and cyber security. Hotung venture team has a long-standing investment relationship in Silicon Valley and China. With our previous senior investment experience, we will seek to take artificial intelligence as the core, and pay attention to sustainable energy, material science and cutting-edge semiconductors developments. As the interest rate in Asia will not likely stay at a low rate as the previous period, funding to other new VC funds will not be as easy as before. I anticipate VC industry to resume the reasonable pricing of start-up companies.
It is quite challenging for venture capitalist to win in every period. In the past years, we have made successful investments in IC design companies (acquired by MediaTek, Qualcomm), EV batteries components (listed in Chaina SCI-Tech Innovation Board “Star Market”), and software company (acquired by Uber). With our 700 investee companies’ networks, we will make best efforts to make good investments for our company. The year highlights the importance of resilience, adaptability, and innovation to cope with uncertain market conditions. We would like to thank you for your continuous support for the company.
Tsui-Hui Huang
Chairman
Taipei, Taiwan
25 March 2024