Activist Palliser builds WUS stake

Activist hedge fund Palliser Capital has boosted its stake in Taiwanese printed circuit board manufacturer WUS Printed Circuit, signaling its focus on undervalued companies thriving in Taiwan's AI boom and semiconductor supply chain. According to Bloomberg, Palliser's holding in WUS rose from 4.3% to over 5%, making it a prominent shareholder under Taiwanese exchange regulations.

The London-based activist, founded by former Elliott Investment Management executive James Smith, sees Taiwan as one of the firm's most promising investment markets. Smith highlighted Taiwan's AI and Nvidia supply chain as key drivers, noting that WUS, based in Kaohsiung, manufactures advanced circuit boards for data centers, aligning with Palliser's investment criteria.

The firm typically targets companies valued between $1bn and $10bn, with significant potential for a re-rating. Palliser praised WUS's lack of family or government control, which they believe keeps the company undervalued despite strong demand in its sector. Limited analyst coverage and the gap in market understanding of WUS's worth were additional factors attracting Palliser.

The activist fund is also exploring opportunities in Taiwan's financial and property sectors, as well as in Japan, where it has invested in Ajinomoto and Toto. Palliser has encouraged Ajinomoto to raise prices for semiconductor insulation materials while urging Toto to promote its semiconductor component operations. Smith expects Japan to remain a key focus, especially for companies with strong products and market positions that might be overlooked due to complex corporate structures or insufficient investor awareness.

He also noted that Japanese corporate leaders are now more open to engaging with international shareholders, a shift from previous difficulties in securing such meetings.