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Hon Hai seeks to cut some units to fight global weakness
Source: AFP |
June 27, 2013, Thursday
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TAIWAN'S Hon Hai Precision said yesterday it plans to spin off some units as its founder unveiled measures to battle global sluggishness and falling share prices.
Hon Hai, the parent company of Foxconn group, saw its sales in the three months to March fall 19 percent from a year earlier to NT$809 billion (US$26.97 billion) as orders from its biggest client Apple slowed.
In reaction to the slowdown, a number of foreign institutional investors have ditched Hon Hai, with their shares falling from 48.06 percent to 40.22 percent since early this year. Hon Hai share prices dived from NT$88.90 to a low of around NT$70 last week.
But in a shareholders meeting, founder and chairman Terry Gou called on its investors to have faith in Hon Hai, the world's biggest electronics contract manufacturer.
"The recent sell-off is not triggered by our business outlook. There's nothing changed regarding our fundamentals," Gou said, adding that Hon Hai has been working to reduce costs and diversify its businesses.
The conglomerate - the world's largest maker of computer components - assembles products for Apple, Sony and Nokia.
Gou said he plans to spin off some companies out of the 26 controlled by Hon Hai, including the unit that produces connectors - a device for joining electrical circuits together.
"Some of our parts and components manufacturing companies are very competitive, they are definitely world class. Their genuine value is not found by many under the present circumstances," he said.
"This is part of Hon Hai's organization restructuring efforts."
Hon Hai, the parent company of Foxconn group, saw its sales in the three months to March fall 19 percent from a year earlier to NT$809 billion (US$26.97 billion) as orders from its biggest client Apple slowed.
In reaction to the slowdown, a number of foreign institutional investors have ditched Hon Hai, with their shares falling from 48.06 percent to 40.22 percent since early this year. Hon Hai share prices dived from NT$88.90 to a low of around NT$70 last week.
But in a shareholders meeting, founder and chairman Terry Gou called on its investors to have faith in Hon Hai, the world's biggest electronics contract manufacturer.
"The recent sell-off is not triggered by our business outlook. There's nothing changed regarding our fundamentals," Gou said, adding that Hon Hai has been working to reduce costs and diversify its businesses.
The conglomerate - the world's largest maker of computer components - assembles products for Apple, Sony and Nokia.
Gou said he plans to spin off some companies out of the 26 controlled by Hon Hai, including the unit that produces connectors - a device for joining electrical circuits together.
"Some of our parts and components manufacturing companies are very competitive, they are definitely world class. Their genuine value is not found by many under the present circumstances," he said.
"This is part of Hon Hai's organization restructuring efforts."
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