Foxconn Technology Group (富士康科技集團), the world’s largest contract manufacturer of electronics, aims for at least 10 percent revenue growth this year as it expands manufacturing and sales in China amid stronger domestic consumption.
“Foxconn’s development, especially in China, is like a microcosm of what China has gone through in reform and development in the last 30 years,” chairman and founder Terry Gou (郭台銘) said yesterday in Shanghai.
Gou, who was at the groundbreaking for the Taipei-based company’s new China headquarters, did not explain why the growth figure was lower than an earlier target.
Hon Hai Precision Industry Co (鴻海精密), the group’s Taipei-listed flagship, on April 28 reported first-quarter net income which missed estimates by 31 percent amid narrower profit margins and losses at its Hong Kong-listed unit. Gou, who halved his long-term target from 30 percent in 2010, said in December that revenue would climb “not less than 15 percent” this year.
“Yes, our first-quarter results were not as good as what some had expected,” he said, without explaining why earnings missed expectations. “We are a manufacturing company, not a financial one. The numbers we focus on are not quarterly numbers, but on numbers over the next three years, even 30 years.”
Yesterday, Hon Hai reported 23 percent annual growth in revenue for last month to NT$251.74 billion (US$8.6 billion). However, that was a decline of 9.68 billion from NT$278.73 billion in March.
In the first four months of the year, Hon Hai made NT$1.04 trillion in revenue, up 37 percent from NT$758.95 billion in the same period last year.
Hon Hai, which gets about 40 percent of its revenue from making Apple Inc’s iPads and iPhones, reported a 15 percent increase in consolidated sales last year, slower than the 53 percent pace in the previous year.
Consolidated revenue is forecast to climb 16 percent this year to NT$4 trillion, according to the average of 12 analysts’ estimates compiled by Bloomberg over the last 28 days. Eleven analysts have cut their estimate by an average of NT$179 billion over the past four weeks, according to data compiled by the Bloomberg.
Foxconn Technology Group, which includes Hong Kong-listed handset supplier Foxconn International Holdings Ltd (富士康控股) and Miaoli-based display panel supplier Chimei Innolux Corp (奇美電子), is expanding its resources in research and development to focus on sales and services for its customers, Gou said.
Its new 80,000m2 building in Shanghai’s Pudong District, to be completed by 2015, will devote a sizable amount of space to allow the company’s customers to display products tailored for the China market, Gou said.
The building will also be a test bed for Foxconn’s new businesses, including electronic commerce, he said.
Additional reporting by Lisa Wang