Mon, Jun 24, 2013 - Page 13 News List

Hon Hai bracing for challenging year ahead

CAUSES FOR CONCERN?Analysts are somewhat cautious on Hon Hai’s prospects because of worries about Apple’s product transition and weakening sales growth

By Kevin Chen  /  Staff reporter

While the spin-off move is unlikely to significantly affect Hon Hai’s overall revenue, investors may apply a discount to the value of Hon Hai’s remaining business following the spin-off, given that the company could become an investment holding entity, he said.

“Holding companies are typically less attractive investments than pure plays,” he said. “We think investors will feel increasingly uncomfortable with Hon Hai’s seemingly random investments.”

Hon Hai shares, which closed at NT$70 on Friday, have declined by 21.26 percent since the beginning of the year, compared with an increase of 1.22 percent in the benchmark TAIEX over the same period.

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