Hon Hai realizes NT$1 trillion dream

Hon Hai Group (鴻海集團) achieved its goal of raking in annual business revenues of NT$1 trillion (US$31.25 billion) last year, three years ahead of its original target, chairman Terry Gou (郭台銘) said on Friday.

Gou -- the nation's richest person with US$3.2 billion in assets according to Forbes magazine's annual survey -- made the announcement at a year-end party for group workers before the Lunar New Year.

Revenues of Hon Hai Precision Industry Co (鴻海精密) and affiliated companies grew by NT$350 billion from 2004 to top NT$1 trillion last year, Gou said at the party.

He said the group's total revenues could increase by at least 30 percent this year and that achieving revenues of NT$2 trillion "is not a dream."

Asked about his views on the economic prospects for this year, Gou said they look good for the first half of the year.

While Hon Hai has always given generously to its workers at its year-end parties, Gou said yesterday that the theme of this year's party was concern for society, and that a portion of the employee awards would be given to charity groups.

Gou, who lost his wife, Lin Shu-ru (林淑如), last year, said the group would donate NT$300 million to charity this year.

Hon Hai Precision's affiliated companies include Foxconn Technology Co (鴻準科技), Solelytex Industrial Corp (首利實業), and Foxconn International Holdings Ltd (富士康控股) in Hong Kong.

Hon Hai, the nation's largest electronics company, made about NT$675.7 billion in revenues last year, while Foxconn International Holdings, a spin-off company of Hon Hai Precision that specializes in mobile handset manufacturing, achieved around NT$200 billion in revenues, according to Hon Hai's statistics.

Hon Hai's profit came mainly from making electrical parts and assembling desktop computers for global vendors such as Dell Inc and Hewlett-Packard Co. The company also supplies parts for Apple Computer Inc's iPod digital music players and Sony Corp's PlayStation game consoles.

Shares of Hon Hai closed at NT$215 on the Taiwan Stock Exchange on Wednesday, the last trading session ahead of the Lunar New Year holiday. The company's stock has risen 18.46 percent since the beginning of this year, compared with the 1.53 percent gain of the benchmark TAIEX.

Hon Hai had its share-price estimate increased by Citigroup Inc on rising demand for components that it makes for products such as Apple's iPod, Citigroup said in a research report dated Jan. 18.

Citigroup analyst Kirk Yang (楊應超) said in the report he expects that orders to assemble and provide components for Sony's PlayStation 3 and Nintendo Co's Revolution game consoles will fuel Hon Hai's sales this year. He raised his 12-month target price on Hon Hai to NT$268 from NT$170.

Daniel Chang (張博淇), an analyst at Macquarie Research, raised his target price on the stock to NT$245 from NT$180, he wrote in a report dated Jan. 25.

Rising iPod shipments will bode well for Hon Hai's revenues this year, Chang wrote, although the company's PC assembly business may face increased competition from rival suppliers, according to the report.

Despite the success, Gou said he will stick to his original plan to turn over the helm of the group in 2008. Gou had previously said he would step down once the group's sales reached NT$1 trillion.