TAIPEI, Taiwan (TheStreet) -- The first-ever visit by a ranking Beijing official to Taiwan, a democratic island that his government wants as its own someday, was supposed to move the two sides toward China's unification goal.
But when the minister of China's Taiwan Affairs Office traveled last week to the place he's in charge of, he made few strong statements, listening more than he talked. He kept clear of protesters until Friday night when one group splashed paint on his bodyguards.
"Seeing the spray of paint at the Zhang group, I think I underestimated the violence by individuals," says Leonard Chu, China a studies professor retired from National Chengchi University in Taipei.
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Word around Taiwan is that Beijing sent the visitor, Zhang Zhijun, to analyze that contempt for China and leave a good impression rather than forge ahead with a new initiative to improve relations and then see it shellacked by fresh opposition.
Because hostility remains in Taiwan, Beijing's goal of peaceful unification with the self-ruled, ethnic Chinese island will extend past whatever its private timetable says and Chinese leaders are pragmatic enough to allow more time.
China's increased patience will bring no change to business, including multinationals active on both sides, but will delay new tie-ups that could make investment easier.
Taiwan's biggest banks such as Cathay Financial (CHYYY) and Mega International Commercial Bank are in China but need more legal clearance to expand. Shippers such as FedEx (FDX) and UPS (UPS) work both sides and would get more orders if two-way trade grew past $124 billion last year. China is Taiwan's top trading partner.
China has claimed sovereignty over Taiwan since the 1940s. The two sides, ever distrustful as Beijing flexed military muscle, barely talked until 2008 when Taiwan President Ma Ying-jeou took office. His government has signed 21 deals with China to help the island's export-led economy but declined to talk about politics.
Beijing is using the pro-Taiwan to nudge Ma or his successors into political talks while charming a skeptical public toward unification.
"Ideally, Taiwan could register the message that Beijing must not push for political outcomes Taiwan is not ready for, but Beijing would remain willing to let Taiwan benefit unequally from the cross-Strait economic relationship," says Denny Roy, senior fellow at the East-West Center, a U.S. research institute in Hawaii.
Thousands of Taipei protesters who camped in streets and inside the parliament building earlier this year questioned Taiwan's six years of engagement with China, frustrating Beijing.
China was on a roll a year ago as it signed a service trade liberalization agreement that would have helped local banks, medical services and tour operators. Then Chinese President Xi Jinping told Taiwan in October the two sides must eventually discuss sticky political issues. China has never sworn off military action, if needed.
But China lost traction in Taiwan with the parliament occupation and broader student-led protests dubbed the Sunflower Movement. Those actions have indefinitely delayed ratification of the service trade pact and put off talks on a tariff cut agreement. Last week's visit to Taiwan was aimed only at reversing that spiral.
The two sides decided little and Zhang went home Saturday after cutting two stops from a four-day schedule to avoid getting painted again.
At the time of publication, the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.
TheStreet Ratings team rates FEDEX CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate FEDEX CORP (FDX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 158.94% and other important driving factors, this stock has surged by 54.01% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, FDX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- FEDEX CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, FEDEX CORP increased its bottom line by earning $6.79 versus $4.92 in the prior year. This year, the market expects an improvement in earnings ($8.78 versus $6.79).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Air Freight & Logistics industry. The net income increased by 140.9% when compared to the same quarter one year prior, rising from $303.00 million to $730.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 3.6%. Since the same quarter one year prior, revenues slightly increased by 3.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.31, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, FDX has a quick ratio of 1.58, which demonstrates the ability of the company to cover short-term liquidity needs.
- You can view the full analysis from the report here: FDX Ratings Report