Hon Hai shares return to prior ex-dividend level in 5 sessions

Taipei, July 8 (CNA) Shares of Taiwan-based manufacturing giant Hon Hai Precision Industry Co. returned to their prior ex-dividend level in the morning session of Monday in five trading sessions after the stock went ex-dividend on July 2.

By around 9:20 a.m., Hon Hai shares had risen 5.36 percent to hit NT$226.00 (US$6.98), a new high in 17 years, vaulting its share price above the July 1 closing level of NT$216.00.

In Taiwan, going ex-dividend refers to the date a stock starts trading without the value of its next dividend payment. When investors are upbeat about a company's share price movements and fundamentals, they buy its shares after the stock goes ex-dividend by taking advantage of a share price cut, expecting it to move higher.

During its annual general meeting at the end of May, Hon Hai, also known as Foxconn on global markets, approved a proposal to issue NT$5.4 in cash dividend per share for the iPhone assembler's earnings in 2023.

Based on its earnings per share of NT$10.25 recorded in 2023, the dividend payout ratio hit 52.7 percent, the highest level since Hon Hai listed its shares on the Taiwan Stock Exchange in 1991.

It was the fifth consecutive year Hon Hai's dividend payout ratio surpassed 50 percent.

Last week, Hon Hai largely moved in consolidation as investors pocketed their gains built in recent months amid a frenzy about artificial intelligence (AI) development.

Hon Hai has forecast its AI server sales will grow more than 40 percent in 2024, and AI server sales are expected to surpass the NT$1 trillion mark in 2025 to boost the entire revenue to top NT$7 trillion, compared with NT$6.16 trillion in 2023.

Hon Hai said the company is working with U.S.-based AI chip designer Nvidia Corp. on AI development.

In the first half of this year, Hon Hai shares soared about 105 percent.

Along with contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which surged 62.9 percent in the six months, the top two stocks in terms of market value, pushed up the Taiex, the weighted index on the Taiwan Stock Exchange, by about 28.4 percent during the same period.

Hon Hai is scheduled to issue a total of NT$74.86 billion in cash dividends on July 31. Terry Gou (郭台銘), founder of Hon Hai, is expected to bag more than NT$9.4 billion in cash dividends as he owns about 1.47 billion shares.

On Friday, Hon Hai reported its highest-ever sales for the second quarter, up more than 19 percent from a year earlier to NT$1.55 trillion, attributing the growth to an increase in shipments of AI-related devices.

Looking ahead, Hon Hai said, the second half of the year is a traditional peak season in the high-tech sector and sales momentum is expected to grow gradually.

Hon Hai forecast it will enjoy year-on-year and quarter-on-quarter sales growth in the third quarter.

The company has scheduled an investor conference for Aug. 14 to detail the second quarter results and give guidance for the third quarter as well as for 2024 as a whole.

At the end of the Monday session, Hon Hai shares rose to the day's high of NT$226.50 and continued to stand above the prior ex-dividend level of NT$216.00.