Hon Hai reportedly to work with OPPO; shares up on dividend payout
2015/09/03 11:42:16
Taipei, Sept. 3 (CNA) Taiwan-based Hon Hai Precision Industry Co. (鴻海), the world's largest contract electronics maker, is in talks with Chinese smartphone brand OPPO to roll out smartphones in India, according to a report by India's Economic Times.
Meanwhile, shares of Hon Hai moved higher on the local main board Thursday morning after going ex-dividend as investors were delighted with the company's high dividend payout and appeared willing to hold onto and even raise their holdings in Hon Hai shares, dealers said.
As of 10:51 a.m., shares of Hon Hai had gained 1.69 percent to NT$84.10 (US$2.58), with 69.92 million shares changing hands on the Taiwan Stock Exchange. The weighted index on the Taiwan Stock Exchange was up 0.64 percent at 8,086.45 points.
In terms of the talks between Hon Hai and OPPO, the Economic Times cited Mike Wang, CEO of the Chinese smartphone brand, as saying that the discussions with the Taiwanese manufacturing giant have entered the final stage. Wang said it is likely that Hon Hai will start to assemble some of OPPO's devices in Tamil Nadu in southern India by the end of November.
Hon Hai is gearing up to set up production bases in India by investing US$2 billion over the next 10 years, eyeing the booming economy of the South Asian country. Hon Hai is expected to open 10-12 factories in India over the next decade.
Hon Hai Chairman Terry Gou (郭台銘) said in August that his investment in India will not be limited to product assembly. Instead, he said, Hon Hai intends to bring a complete supply chain to India to carry out long-term strategic investment there. Hon Hai is seeking partners to penetrate the Indian market and OPPO could be on the Taiwanese firm's list.
"We are still discussing the number of assembly lines that we would want to put in to cater to the demand in the Indian market," Wang said in the Economic Times report.
He did not elaborate on whether OPPO will share Hon Hai's production lines with other smartphone brands or whether the facility will be for OPPO specifically.
In Taipei, shares of Hon Hai, which assembles iPhones and iPads for Apple Inc., extended momentum seen a session earlier to go higher Thursday morning after the stock went ex-dividend in reflection of its high dividend payout policy.
Hon Hai will issue a dividend of NT$4.3 per share for 2014, the highest dividend payout in the company's history. The dividend is comprised of a cash dividend of NT$3.8 and a stock dividend of NT$0.5. Hon Hai is expected to dole out more than NT$56.21 billion in cash dividends to shareholders.
Impressed by the high dividend payout, foreign institutional investors bought a net 13.12 million Hon Hai shares Wednesday, the largest net buy among the stocks listed on the local main board. Market analysts said that strong foreign institutional interest also led investors here to pick up Hon Hai shares Thursday.
Analysts said that as Apple is expected to unveil the next generation of the iPhone Sept. 9, Hon Hai, one of the main suppliers to the U.S. firm, will benefit from the new products by securing an increase in orders to boost its shipments for the fourth quarter of this year.
(By Jalen Chung and Frances Huang)
