CDW Holding Limited has updated on its diversification efforts and announced a new strategic direction which is centered around the United Nations’ Sustainable Development Goals (UN SDGs).
CDW is a leading manufacturer of LCD Backlight Units (BLU) for applications in various industries such as computer, automotive, and gaming, plus has recently built up a promising OEM business in producing electronic payments systems and digital content editing devices. As the Group operates in a challenging industry with intense price competition and short product life cycles, it embarked on a diversification strategy in 2016 into the life science and green businesses.
Life Sciences
CDW holds a patent for a synthetic antibody library through its subsidiary GSP Enterprise Inc (GSP), which was established by the late Honorary Professor Shimizu Nobuyoshi of Keio University and acquired by CDW in 2018. GSP builds upon the late Professor Nobuyoshi’s fundamental research in the medical field of specific antibodies to target tumours, viruses or other diseases, with the aim of creating immunotherapies for them. A Biotech Co., Ltd (ABio) was established in South Korea at the same time for antibody-related research and development.
CDW had previously announced key milestones in the development of novel antibody drugs aimed at treating various cancers. The most promising candidate thus far, the anti-Cripto-1 antibody, was patented in September 2020 and has been shown to be effective at inhibiting the self-proliferation of cancer stem cells. Anti-Cripto-1 antibody research is continuing with a pre-clinical efficacy study at the National Cancer Centre of Korea.
“The late Professor Emeritus Nobuyoshi Shimizu of Keio University passed away from cancer in 2015 after founding GSP to commercialize his research. In 2018, we acquired GSP to continue the late Professor Shimizu’s legacy and advance his cancer drug development fundamental research, and help more people suffering from cancer globally. ABio was established at the same time and is currently continuing its research in collaboration with GSP.”, said Mr Yoshikawa Makoto, the Chairman and Chief Executive Officer of CDW.
Apart from treating serious illnesses through R&D, CDW is also addressing the growing consumer demand for beauty and wellness, with the acquisition of IP Rights in 2016 for the functional use and manufacture of organic compounds. This includes Pterostilbene Glycoside products which have antioxidant, anti-aging and hair growth benefits. In the future, CDW aims to licence out its recently acquired patent on the cancer stem cell growth inhibitory effect of pterostilbene and/or its glycosides.
In September 2021, CDW launched its own skincare brand YOSHIMI JAPAN following five years of research and development into the anti-aging pterostilbene glycoside compound. This compound has shown to have greater efficacy at addressing the anti-wrinkle segment of topical beauty products, and is currently available online to consumers in Japan, China, Hong Kong and Singapore. A licensing agreement has also been signed with a Japanese cosmetics manufacturer to use pterostilbene glycoside in various product lines of the manufacturer’s customers, with product launches to begin later this year.
Environment-Friendly Products and Green Technologies
As a contract manufacturer, CDW is keenly aware of the carbon footprint and environmental impact caused by traditional industries, therefore it is pursuing new opportunities in environmental products and technologies, such as clean energy and nanomaterials.
In July 2021, CDW secured the rights to distribute CUBOX portable lithium-ion battery packs for use in industrial, household and medical settings in Japan.
CDW has also obtained global distributorship rights to Japanese alkaline water generator brand, Nihon Trim Co.,Ltd1. (TRIM). TRIM’s alkaline water generators are used across a wide variety of settings; ranging from home, to hospitals, commercial, and agricultural businesses. This deal will allow CDW to capture new opportunities as the demand for alkaline water generators grows around the world. According to market research firm Global Information Inc., the global water ionizer market is estimated to grow at a CAGR of 4.22% to reach over US$ 1.6 billion by 2027.
CDW has also secured exclusive rights to market and distribute electric boat propulsion systems in Japan, which are developed by Electrine of Korea (formerly LGM Co., Limited, which CDW has a 2.3% stake), a leading Korean electric boat building company. Discussions for the rights to market and distribute in Hong Kong and Singapore are ongoing. The electric boat propulsion system was the first electric propulsion unit in Japan to qualify for pre-inspection and requires no fossil fuels, thus realising CDW’s goal of decarbonisation.
Additionally, the CDW will develop and sell fuel-efficient and environment-friendly ship-bottom paints which use nanomaterial technology. Further sample tests are underway on marine vessels to improve the efficacy of the paints.
Adopting the UN SDG Framework
In order to focus its diversification efforts, CDW has adopted a strategic framework centred around the UN SDGs, which consists of 17 goals and 169 targets. Adopted at the UN Summit in September 2015, the goals were set by 193 UN member countries to be achieved in 15 years from 2016 to 2030.
The last few years have seen renewed focus among institutional investors on environmental, social, and governance, or ESG standards. The scars of the global pandemic, as well as mounting concerns over the impact of environmental degradation from global industrial activity have led to rising demand for sustainability solutions.
“CDW has always been exploring opportunities in the areas of health and environment. This would further enhance our attractiveness to institutional investors, as we continue to strengthen our revenue streams and diversify our competencies beyond LCD backlight units”, remarked Mr Yoshikawa Makoto.
Meeting growing ESG demand
With investments in ESG trending, CDW believes that its new strategic direction is the right step forward to meet growing demand from institutional investors. Bloomberg forecasts that ESG Assets Under Management (AUM) could grow to US$53tn by end-2025, having already reached US$30.6tn by end-2021. On the debt-issuance front, ESG-themed issuance took almost 12 years from 2007, to reach US$1tn but just one year to reach USD2tn over 2020. In just the first six months of 2021, it crossed another US$1tn and is estimated to surpass USD11tn by end-2025.
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CDW Holding Limited (the “Company” and together with its subsidiaries, the “Group”) is a Japanese-managed precision components specialist serving the global market focusing on the production and supply of niche precision components for digital instrument panels in the automobile industry, notebook computers, consumer and information technology equipment, office equipment and electrical appliances, and an original equipment manufacturer. The Group is headquartered in Hong Kong and has operations in Japan, China, South Korea, Thailand and the Philippines. The Company has been identifying new businesses to invest in with the potential for growth and entered as part of its diversification strategy and has made forays into the Life Sciences sector since 2016. The Company’s aim for its Life Sciences business is to identify research-driven yet commercialisable projects that can have a positive impact on the quality of human life.
