Table of Contents
On May 26, 2023, a company attracted market attention due to suspected unconventional transactions, potentially violating several provisions of the Securities and Exchange Act. That company is AboCom (2444.TW), a well-established Taiwanese networking equipment manufacturer with business interests spanning six major areas: networking manufacturing, advanced precision manufacturing, IoT applications, advanced laser chips and wafer materials, and memory business.
Among these six areas, AboCom’s primary value lies in the networking industry, where it initially thrived and even became the world’s largest PCMCIA manufacturer. However, with ever-changing technologies, the PCMCIA market gradually declined, leaving AboCom struggling to find its identity and profitability. Since going public in 2000, the company only managed to remain profitable for a mere 10 years.
Throughout its transformation journey, AboCom experienced multiple changes in leadership, as various parties vied for control in pursuit of maximizing the company’s and shareholders’ interests. This resulted in prolonged instability in AboCom’s management. This article focuses on AboCom’s efforts to maintain its core product competitiveness and undergo a proactive transformation while enduring the turbulent changes in leadership and operational conditions. Additionally, the article introduces how TEJ assesses group attribution amidst the turmoil in leadership, enabling readers to gain a comprehensive understanding of AboCom’s history and to analyze the company’s profitability and operational status from a group perspective.
AboCom (known as ZhongWang at that time) was established on June 12, 1995, by three individuals: Chen Bing-Yi, Ouyang Zi-Kun, and Hsu Chih-Jen. The company’s primary focus at the time was the manufacturing and sales of network cards. Bing-Yi, Chen served as the Chairman, primarily responsible for research and development; Zi-Kun, Ouyang was the General Manager, overseeing management and marketing; and Chih-Jen, Hsu held the position of Deputy General Manager in charge of research and development.
Both Bing-Yi, Chen and Zi-Kun, Ouyang had previously worked at D-Link Corporation (2332.TW). Chen joined D-Link in 1987 and served as the Deputy General Manager, while Ouyang was Factory Manager. Luckily, Ouyang’s mentor at Tamkang University, Her-Hsuan, Kao, was also associated with D-Link Corporation. After graduating, Ouyang entered D-Link Technology in 1988, and at the beginning of ZhongWang’s venture, he received support from Kao. At that time, ZhongWang was a single company and had not yet formed a corporation.
In the early stages of its operation, the company faced losses in its first year with an operating profit of -2,96 million NTD. Struggling with a lack of funds, they sought help from Kao at D-Link Corporation. Kao not only contributed from his own pocket but also convinced his younger brother, who was the Chairman of D-Link Technology, to participate in the cash increase of ZhongWang Technology in 1997. The investment amounted to 50,000 million NTD, increasing their ownership stake to 51%. As a result, ZhongWang Technology was renamed to YoWang Technology and became part of the D-Link family, specializing in the manufacturing of PCMCIA cards.
YoWang Tech went public on April 26, 1999, and was listed as a high-tech stock on December 8, 2000. In April 2001, the stock price reached its historical high of 116 NTD. TEJ included YoWang Technology as part of the D-Link Corporation in April 1997.
