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How Liu Yangwei Gained Support from Foreign Shareholders?

How Liu Yangwei Gained Support from Foreign Shareholders?

Under Liu Yangwei's leadership, Hon Hai's stock price and profitability have surpassed those of the Gou Tai-ming era, attracting broad support from foreign shareholders. Since taking office as chairman in 2017, he has successfully been re-elected with strong backing from foreign shareholders, despite not having the support of Gou in the current election.

Foreign shareholders have focused on profitability, dividends, stock prices, corporate transparency, and governance. Looking at Hon Hai's performance, after reaching a low profit of 108 billion TWD in 2020, it rebounded year by year. Last year, with the aid of AI servers and related components, revenue hit 6.86 trillion TWD, an increase of 11.3 percent year-on-year, while net profit reached 152.7 billion TWD, up 7.5 percent, and EPS reached 11.01 TWD, marking an increase of 0.76 TWD compared to the previous year.

Despite unfavorable factors this year, such as tariff impacts and rising exchange rates, Liu stated at the shareholder meeting that there is an opportunity for significant growth this year, with revenue challenging the 7 trillion TWD mark. As profits have increased each year, the board voted to distribute a cash dividend of 5.8 TWD per share, up from 5.4 TWD the previous year, marking a new high since its listing in 1991, and the dividend rate has exceeded 50 percent for six consecutive years.

Although Hon Hai's stock price began to decline in the last quarter of last year and hit 112.5 TWD during the April stock market crash, it was during Liu's leadership that the stock price rose firmly above 100 TWD, reaching a peak of 234.5 TWD in July last year, the highest level since 2007. In terms of corporate transparency and governance, Liu has changed the practices from the era of Gou, regularly holding briefings and often explaining operational conditions himself. The board has also continued arrangements from the previous session, nominating five independent directors out of nine total board members to emphasize corporate governance.

Although Liu remains the chairman and CEO during this term, indicating that separation of powers in corporate governance is still a work in progress, he announced at this year's shareholder meeting that the rotational CEO system initiated last year will become a formal transitional approach for future permanent CEOs. He aims to gradually separate the powers of chairman and CEO, indicating that this will occur in the next board meeting.