Tue, Feb 19, 2013 - Page 14 News List

Hon Hai vows to expand investment in the nation

OPTIMISM:The group plans to expand investment throughout Taiwan, with a focus on research and development, as well as build housing for employees

Staff writer, with CNA

Hon Hai Group (鴻海集團) chairman Terry Gou (郭台銘) yesterday expressed optimism over the nation’s development prospects and pledged to continue to expand the company’s operations in the nation.

Hon Hai will expand its investment in northern, central and southern Taiwan this year, with a focus on research and development, Gou said at a ceremony held at the group’s headquarters in New Taipei City (新北市) to reopen the office after the Lunar New Year holiday.


There are also plans to recruit several thousands engineers and to build housing for workers in the city’s Tucheng (土城) and Sansia (三峽) districts to allow employees to live closer to work, Gou said.

Commenting on one of the group’s investment projects, Gou said Hon Hai still preferred to build an intelligent robotics and automation equipment production hub in Greater Taichung despite efforts by the Changhua County Government to lure it away.

Changhua County is hoping that Hon Hai will build the hub in the Erlin (二林) extension of the Central Taiwan Science Park, but Gou said he did not think the Erlin park was a suitable location because it is designed for the flat-panel industry.

Asked if the group is still aiming for at least 15 percent revenue growth this year, Gou said that the company had no intention of changing its sales growth target.

Gou said last year that Hon Hai was set to achieve at least a 15 percent annual increase in revenue.

The company’s unconsolidated revenue last year reached a record-high of NT$3.22 trillion (US$108.94 billion), up 16.09 percent from 2011, according to a press release on Jan. 10.


However, the company’s consolidated revenue of NT$313.53 billion last month, down 8.19 percent year-on-year, has raised concerns about its near-term outlook, with Fubon Securities Investment Services Co (富邦投顧) analyst Arthur Liao (廖顯毅) citing weak iPhone 5 sales.

“With no new [iPhone] models until July, Hon Hai’s sales downtrend will likely continue,” Liao said in a note to clients yesterday.

Liao said the key reason behind the iPhone 5’s weaker sales was its smaller screen size at only 4 inches.

As a result, Fubon Securities has revised its iPhone 5 and total iPhone shipment forecasts down to 22 million units and 34 million units in the first quarter of this year, from 41 million and 49 million units in the fourth quarter of last year, he said.


Gou also proposed that Taiwan follow the example of Las Vegas and set up a special casino area with convention and exhibition facilities in Tamsui District (淡水) in New Taipei City to boost the economy.

The casino industry has expanded beyond gambling and has become a platform to promote employment, tourism, consumer spending and technology exhibitions, he said.

Hon Hai shares fell 0.96 percent to NT$82.80 yesterday on the Taiwan Stock Exchange. The company’s stock has declined 18.42 percent over the past 12 months, compared with a 0.62 percent rise on the benchmark TAIEX, stock exchange data showed.

Additional reporting by Kevin Chen

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