Hon Hai shareholders approve cash dividend of NT$4.2 per share

 

Taipei  Shareholders of Taiwan-based manufacturing giant Hon Hai Precision Industry Co. on Tuesday approved a proposal to pay a cash dividend of NT$4.2 (US$0.14) per share on the company’s 2019 earnings.

Following the decision by its shareholders at an annual general meeting, Hon Hai will issue a total of NT$58.224 billion in cash dividends to its shareholders with its founder Terry Gou expected to receive more than NT$5.6 billion.

Gou, one of the wealthiest tycoons in Taiwan, holds about 1.34 billion shares, or a 9.67 percent stake, in the company.

Hon Hai, the world’s largest contract electronics maker, in May proposed the cash dividend of NT$4.2 after posting an earnings per share of NT$8.32 in 2019.

Last year, Hon Hai reported NT$115.31 billion in net profit, down 10.66 percent from a year earlier, but its EPS was the highest in three years at NT$8.32, after the company cut its paid-in capital by 20 percent to NT$138.63 billion in 2018.

While some shareholders had hoped for a bigger cash dividend, the company wanted to keep as much cash as possible on hand for future investments, as it expands from only manufacturing to hardware and software development, according to Hon Hai Chairman Liu Young-way .

Liu, who succeeded Gou as chairman of Hon Hai after the latter entered politics last year, said the company is sitting on more than NT$670 billion in retained earnings.

Hon Hai will also allocate the funds to future investments and COVID-19 prevention, Liu said. Known as Foxconn in the global market, Hon Hai has a workforce of more than 1 million in China, where the COVID-19 pandemic started at the end of last year.

Through investments, Liu said, Hon Hai is increasing its technology upgrade efforts in three phases to focus on artificial intelligence, semiconductors, new generation communications, cyber security, and Quantum computing, Lui said.

In the initial phase, Hon Hai’s gross margin — the difference between revenue and cost of goods sold — is expected to increase by 1 percentage point to 7 percent, and when the upgrade is complete, the company’s gross margin is likely to rise to 10 percent by 2025, he said.

 

Source: Focus Taiwan News Channel

 

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