Shareholders of Hiroca Holdings (廣華控股), a Taiwanese automobile parts maker based in China, yesterday approved the distribution of cash dividend of NT$2.5, with a payout ratio of 42.59 percent this year, with the company planning to save the rest of its annual profit for capacity expansion.
“The payout ratio next year will definitely be higher than this year, because we will be less in need of funds after finishing all our projects in China,” chairman Yu Tse-min (余澤民) told shareholders at an annual general meeting yesterday.
The dividend payout this year is based on the company’s profit of NT$458.39 million (US$15.23 million), or NT$5.87 per share, last year, according to the company’s filing with the Taiwan Stock Exchange.
The payout ratio this year was still higher than 33.19 percent rate seen last year, when the company distributed a cash dividend of NT$1.5 and stock dividend of 10 percent, based on its earnings per share of NT$4.52 in 2012.
The company also told shareholders its plans to pursue big fixed asset investment this year in China, which would help expand its manufacturing capacity and meet its clients’ needs.
The company plans to invest 26 million yuan (US$4.17 million) to form a joint venture with a Chinese car-seat maker involving building a factory in Chongqing, China, it said, adding that Hiroca Holdings will own 40 percent of the new plant’s shares.
The factory is expected to be operational next year and will supply its products to China-based car maker Changan Automobile Group (長安汽車), the company said.
Hiroca Holdings will also invest 15 million yuan to build a plant in Xiangyang, Hubei Province, China, which is expected to be operational next year, and the factory will ship its products to Dongfeng Motor Co (東風汽車) and generate revenue of 100 million yuan to 200 million yuan a year, it said.
The company plans to build a new plant in Dongguan, Guangdong Province, China, next quarter, with the construction set to be completed by the end of the year, it added.
The company is to issue 6.9 million shares in the second half of this year to raise funds for loan payments and replenish its operating funds, it said.
Yu said the company aims to achieve 20 percent revenue growth this year, as Hiroca Holdings is likely to benefit from rising car sales of Chinese subsidiaries of Toyota Motor Co, Honda Motor Co and Nissan Motor Co this year, and orders from local operations of France-based PSA Peugeot Citroen and Italy-based Fiat Industrial SpA will also rise.
Sales to Japanese car makers are to account for 70 percent of Hiroca Holdings’ revenue this year, while sales to European and US car makers will account for 30 percent, he said.
From January through last month, Hiroca Holdings registered a revenue increase of 30.15 percent to NT$2.59 billion, up from NT$1.99 billion the previous year, according to filing.
Shares of the company declined 0.86 percent to NT$115.5 in Taipei trading yesterday, underperforming the TAIEX, which was up 0.31 percent.
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