Sat, Apr 17, 2010 - Page 12 News List

Yuan rise could boost Hon Hai assets

BLOOMBERG

Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract electronics manufacturer, said the Chinese yuan’s appreciation could boost the value of its real-estate assets in China.

At the same time the yuan’s appreciation will have a “limited” impact on costs, Edmund Ding (丁祈安), a spokesman for the Taipei-based company said in a telephone interview yesterday.

Only between 4 percent and 8 percent of Hon Hai’s costs are in yuan, he said.

A revaluation of the company’s real estate in China may result in the company booking a gain in the long term, Ding said.

Hon Hai, maker of Apple Inc iPhones and Hewlett-Packard Co computers, has most of its 486,000 workers and production facilities in China.

“Most of our position is in a natural hedge because we import-export” in US dollars, Ding said.

Manufacturers buy components such as chips and screen panels, and quote sales prices in the US currency.

“We have quite some amount of assets in China, and we have also followed the government’s policy to develop in the west of China,” Ding said. “In the long run, if we decide to re-evaluate the value of our assets, then that would be reflected in our financial book. But not now.”

Hon Hai’s long-term assets at the parent level were valued at NT$368.6 billion (US$11.8 billion) at the end of September, data compiled by Bloomberg showed.

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