Sat, Jun 23, 2018 - Page 12 News List

Gou apologizes for missed sales target

STABILITY:Hon Hai’s chairman said that he would not retire and there would be no succession planning until a restructuring is completed and the share price hits NT$200

By Ted Chen  /  Staff reporter

Hon Hai Precision Industry Co chairman Terry Gou speaks at the company’s annual general meeting in New Taipei City’s Tucheng District yesterday.

Photo: Cho Yi-chun, Taipei

Hon Hai Precision Industry Co (鴻海精密) chairman Terry Gou (郭台銘) yesterday apologized to shareholders for missing last year’s sales growth target and appealed for continued support for the company’s corporate transformation.

Hampered by a strengthening New Taiwan dollar, the world’s biggest contract electronics maker last year posted an 8 percent annual sales gain, falling short of its 10 percent growth target.

The company requires time to carry out its transformation plan, which is centered on achieving early dominance as a provider of the next generation of industrial-grade technologies, including artificial intelligence (AI), big data, cloud computing, industrial Internet and cybertechnology, Gou said.

Speaking at the company’s annual general meeting in New Taipei City’s Tucheng District (土城), Gou said that Hon Hai’s industrial AI is vastly different from generalized AI, which is more geared toward consumers.

Industrial AI and Internet aim to enhance current domain know-how and have much less tolerance for inaccurate data in critical applications, he said.

“I am optimistic about the future of Hon Hai, as manufacturing will only become more important,” Gou said.

The need to deliver tangible products into consumers’ hands will remain, despite continued advancements in online channels and the digitization of processes, he said.

“The real economy will remain as the main driver of the global transition to smart technologies,” Gou said.

He also allayed concerns that Hon Hai could be diminished into a holding company after it spun off its most promising businesses units to form Foxconn Industrial Internet Co (FII, 富士康工業互聯網), a Shenzhen, China-based subsidiary that staged a speedy marquee initial public offering earlier this month on the Shanghai Stock Exchange.

FII’s Shanghai listing was aimed at ensuring growth and attracting funding and talent in the vast Chinese market, Gou said.

The fruits of FII would always belong to Hon Hai, including its earnings and research and development advances, Gou said.

Taiwan-based Hon Hai would still represent the conglomerate in global markets, he said, adding that Hon Hai still oversees major investment, such as a cutting-edge flat-panel display plant in Wisconsin.

However, it is difficult for the company to disclose key performance indicators and information on order visibility related to Hon Hai’s corporate transformation beyond regulatory requirements, as doing so would be disruptive to markets and clients’ operations, he added.

He also apologized for capital losses incurred by shareholders due to the company’s listless stock price performance.

“There will be no retirement and succession planning in the next five years as the company continues its transformation,” Gou said.

Gou said he is in good health and promised to do everything in his power to increase the price of Hon Hai shares to NT$200.

He apologized for the current valuation of the shares, saying that he “would not consider retiring before the share price reaches NT$200.”

Hon Hai shares yesterday slid 0.48 percent to NT$82.3 on the Taiwan Stock Exchange — a long way from its historical high of NT$300 on June 21, 2007.

Hon Hai is to distribute a cash dividend of NT$2 and a cash distribution of NT$2 per share following its first-ever 20 percent capital reduction, which was announced last month and gained shareholder approval yesterday.

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