Hon Hai issues highest cash dividend in firm’s history

Hon Hai Precision Industry Co. (??), the world's largest contract electronics maker, on Friday doled out more than NT$62.5 billion (US$1.99 billion) to shareholders, the highest cash dividend issuance in the company's history.

Hon Hai, an assembler of iPhones and iPads for Apple Inc., issued a dividend of NT$5 per share based on earnings per share of NT$9.42 recorded in 2015.

The NT$5 dividend was comprised of a NT$4 cash dividend and a NT$1 stock dividend. As a result, the total amount of cash dividends issued by Hon Hai was NT$62.55 billion and the stock dividend was valued at NT$15.64 billion.

According to Hon Hai's filing with the Taiwan Stock Exchange, company chairman Terry Gou (???) owned a total of 1.93 billion Hon Hai shares as of the end August. As such, Gou, already one of the richest men in Taiwan, was estimated to have received a cash dividend of more than NT$7.715 billion on Friday.

Gou announced at an annual general meeting held in June that he would donate all of the cash dividend from Hon Hai to National Taiwan University Hospital to fund further R&D into cancer treatment and prevention.

Hon Hai is just one of Taiwan's profitable high-tech firms to hand out large cash dividends based on 2015 earnings. For example, contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the most heavily weighted stock on the local market, issued NT$155.58 billion in cash dividends.

According to market statistics, listed companies in Taiwan will issue a total of NT$1.1 trillion in cash dividends based on their 2015 earnings, the highest level in the local equity market.

Despite the announcement shares in Hon Hai remained within a narrow band on the local bourse, indicating that many investors who received dividends did not reinvest the money in company shares amid lingering concerns over a possible interest rate hike by the U.S. Federal Reserve.

Hon Hai shares fell 0.25 percent to close at the day's low of NT$80.20, off an early high of NT$80.50 on the local main board, while the weighted index lost 0.2 percent to end at 9,265.81 0.26 percent.

Market analysts said that Hon Hai is expected to report an improvement in revenue for September after Apple unveiled its latest iPhones -- the 4.7-inch iPhone 7 and the 5.5-inch iPhone 7 Plus -- which hit stores worldwide earlier this month.

For the third quarter, Hon Hai is expected to report consolidated sales of about NT$1.05 billion, up more than 10 percent from the second quarter, analysts said.

On the back of peak season effects, Hon Hai is expected to report higher consolidated sales in the fourth quarter, the highest quarterly revenue level for this year, analysts added.

Source: Focus Taiwan News Channel