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MarketScreener Homepage  >  Equities  >  TAIWAN STOCK EXCHANGE  >  Foxconn Technology Co Ltd    2354   TW0002354008

FOXCONN TECHNOLOGY CO LTD

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Foxconn Gets China OK for Sharp Deal; Profit Slumps

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08/11/2016 | 10:15am EDT

BEIJING-Chinese antitrust authorities approved Foxconn Technology Group's deal to buy troubled Sharp Corp., clearing the final hurdle to one of the biggest takeovers of a Japanese electronics company by a foreign firm.

The news on Thursday came as Apple Inc. assembler Foxconn, formally known as Hon Hai Precision Industry Co., reported a 31% decline in second-quarter net profit as iPhone sales fell in a maturing smartphone market.

Under the terms of the takeover, announced in March, Taiwan-based Foxconn is to pay 388.8 billion yen ($3.8 billion) for about two-thirds of Sharp.

Foxconn was interested in Sharp partly because of the Japanese company's business in making screens for smartphones. Sharp is also a supplier of screens used in Apple's iPhones.

Foxconn said net profit for the three months ended June 30 fell to 17.7 billion New Taiwan dollars (US$566 million) from NT$25.7 billion a year earlier.

Analysts expected a profit of NT$23.9 billion, according to an average estimate by Thomson One Analytics.

Consolidated revenue fell 5.2% to NT$922 billion from NT$972.7 billion a year earlier.

After years of rapid growth, Apple posted a decline in profit in its last two quarterly results, as iPhone sales are crimped by competition from Chinese brands and growing market saturation.

Foxconn's results didn't include the Sharp acquisition.

At its annual shareholder meeting in June, Foxconn Chairman Terry Gou said the company faced a tough business environment and was focused on investing in next-generation technologies and streamlining operations at Sharp to make the Japanese firm profitable.

Foxconn isn't the only Apple supplier that has taken a hit from slowing iPhone sales.

Sharp last month reported a net loss of ¥ 27.5 billion ($266 million) for its fiscal first quarter because of sluggish sales of its display panels.

Earlier this week, Japan Display Inc. said it lost about $115 million in the April-June quarter and turned to its top shareholder, the government-backed Innovation Network Corp. of Japan, for support.

Write to Eva Dou at eva.dou@wsj.com and Takashi Mochizuki at takashi.mochizuki@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
APPLE -1.46% 217.73 Delayed Quote.38.03%
FOXCONN TECHNOLOGY CO LTD End-of-day quote.
HON HAI PRECISION INDUSTRY CO., LTD. End-of-day quote.
JAPAN DISPLAY INC 3.08% 67 End-of-day quote.1.52%
SHARP CORPORATION 1.13% 1258 End-of-day quote.18.34%
US DOLLAR / JAPANESE YEN (USD/JPY) 0.05% 107.713 Delayed Quote.-1.93%
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Financials (TWD)
Sales 2019 123 B
EBIT 2019 7 731 M
Net income 2019 8 649 M
Finance 2019 60 672 M
Yield 2019 4,81%
P/E ratio 2019 10,6x
P/E ratio 2020 10,2x
EV / Sales2019 0,26x
EV / Sales2020 0,23x
Capitalization 92 790 M
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Mean consensus HOLD
Number of Analysts 6
Average target price 65,17  TWD
Last Close Price 65,60  TWD
Spread / Highest target 20,4%
Spread / Average Target -0,66%
Spread / Lowest Target -20,7%
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NameTitle
Han Ming Li General Manager
Chih Chien Hung Chairman
Tzu Hung Li Head-Finance
Hsueh Kun Li Director
Fang I Cheng Director
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