Wed, Jan 19, 2005 - Page 11 News List

Hon Hai sees 30% Q1 sales hike

ROSY VISION Chairman Terry Gou says some employees will have to work over New Year's to meet demand. Meanwhile, its handset group is reading its Hong Kong IPO

By Lisa Wang  /  STAFF REPORTER , WITH BLOOMBERG

Hon Hai Precision Industry Co (鴻海精密), the world's top component maker of computer-related products, expects its first-quarter sales to jump 30 percent over the same period last year, boosted by sustained demand from Christmas, a company executive said yesterday.

"Overall, we feel the first quarter is quite good, compared to the same period last year as Christmas demand for consumer gadgets has not subsided as it did in the past," said chairman Terry Gou (郭台銘), adding that a similar situation has occurred in other electronic segments.

"The first quarter will not be a slow as it was before," he said.

Built on that optimism, Gou said he "is very confident in" hitting the company's target of 30 percent sales growth in the three-month period to March, from NT$78.4 billion a year ago.

"Some of our employees will have to work overtime during the Lunar New Year holidays to meet the demand," he said.

Hon Hai's sales for the fourth quarter of last year climbed around 27 percent to NT$136.8 billion, from NT$107.8 billion year-on-year, according to the company.

When asked if the strong New Taiwan dollar would weigh down Hon Hai's bottom line, Gou said there would be some impact but the company would try to reduce the impact through more stringent cost control.

Hon Hai said its sales last year grew 26 percent to NT$413.4 billion, from NT$327.9 billion in 2003.

In other developments, the com-pany's handset unit, Foxconn International Holdings, plans to raise as much as HK$3.37 billion (US$432.6 million) in its initial public offering in Hong Kong, according to a share sale document.

The company is selling 869.4 million shares, or 12.7 percent of its enlarged share capital, at between HK$3.06 and HK$3.88 apiece, the document said.

Goldman Sachs Group Inc. and UBS AG are arranging the sale.

Foxconn is selling shares as the number of handsets manufactured worldwide is expected to jump 41 percent from 2003 to 726.5 million units this year, the company's document shows.

The company plans to spend 54 percent of the sale's proceeds to expand production in China, Hungary and South America, and two-fifths to repay loans.

Foxconn plans to set the price of its shares on Jan. 27 in the US and start trading in Hong Kong on Feb. 3, the sale document said.

Foxconn, which started operations in 1999, had US$2.1 billion of sales in the nine months ending last September, almost doubling its 2003 profit, the document said.

Profit at the company rose by a third to US$134.5 million in the three quarters that ended in September from the same period in 2003.

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