Hon Hai shareholders look for positive leads
June 22, 2014, 12:00 am TWN
TAIPEI--Shareholders of Hon Hai Precision Industry Co., the world's largest contract electronics maker, are looking for positive leads to be released from the company's upcoming annual general meeting scheduled for June 25 to pave the way for further gains in its share price, market analysts said yesterday.
At issue among Hon Hai shareholders is the outlook of the company's sales for the second half of this year, while its efforts to transform itself into a technology services provider from manufacturing and enter 4G services are expected to be addressed in the meeting, the analysts said.
Shares of Hon Hai appeared resilient a day earlier, up 0.43 percent to NT$94.30 (US$3.14) against a 0.60 percent drop in the electronics sub-index and a 0.46 percent decline on the broader market.
In recent sessions, upbeat sentiment about Hon Hai's outlook for the second half of the year, when Apple Inc. will unveil the next generation of iPhones and iPads, have stirred up strong buying from foreign institutional investors.
Since the beginning of June, foreign institutional investors served as net buyers of 48.88 million Hon Hai shares. Foreign investors owned 49.91 percent of Hon Hai's outstanding shares Friday, up from 43.52 percent recorded Dec. 31, 2013.
Hon Hai is considered an Apple concept stock, as the U.S. firm accounts for about 40 percent of the Taiwanese firm's total sales.
Shareholders want to hear what Hon Hai Chairman Terry Gou has to say about the company's sales growth and prospects for the second half of the year. In a recent media interview, Gou said his group has set a goal of posting a 10 percent increase in sales every year.
In terms of Hon Hai's business transformation, it is planning to spin off three to five of its subsidiaries into independent entities per year for future business expansion, while the parent company will serve as a holding company to manage the group's patent portfolio and supervise finances.
Shareholders are looking for updates about Hon Hai's business transformation plan, which aims to take advantage of the company's manufacturing strength and extend its reach into technology services, analysts said.
Ambit Microsystems Corp., a subsidiary of Hon Hai Precision Industry Co., will acquire mid-sized telecom operator Asia Pacific Telecom Co. in a bid to speed up its pace of developing 4G services in Taiwan.
In addition, analysts said, Hon Hai is expected to reveal more about its overseas investments, as the company is planning to inject more funds into several markets this year, including the United States, Japan and Indonesia.