Eight-hour marathon shareholder meeting, Terry Gou: Employees shouldn't go on business.

The 8-hour marathon shareholder meeting, the largest 500~600 shareholder of the year, is the "pomp" of the June 26, 2013 Hon Hai (2317.TW, the mainland's so-called "Foxconn") shareholders ' meeting.

There are two reasons for concern: on the one hand, the global economic situation is not good, Hon Hai's January-June revenue fell 12.59% Year-on-year, the target is far from the year 15% growth, on the other hand, Hon Hai shareholders have too many problems to be thrown to chairman Terry Gou, such as Heshuo (4938.TW) Rob a single, "Hon Xia ( General) Love "encounter resistance, the cause of part demolition, electrical business layout, and even retirement problems."

Mr. Gou replied. He assured small shareholders that, no matter how the environment changed, the company will profit this year more than last year, the next two or three years will be very optimistic.

2010, in response to the "toughest" employee series, in the 2013 "Critical Years", Gou has been in the business of "a Century of transition": the fleet split, the size-take-all, the final layout of the arrangement will be the main axis, Mr Gou has prescribed "prescriptions" for moving inland, raising wages, improving automation, and seeking access to the local electricity business Perhaps the layout also includes building own brands.

Split: Stone?

In response to the economic downturn, Mr Gou said Hon Hai would continue to open revenue and cut spending this year, and that "employees should not go on business trips".

Hon Hai's January-June revenue fell 12.59% per cent year-on-year, following a slowdown in Apple's growth and the Heshuo of orders such as the iphone's cheap version. "OEM aircraft carrier" encountered its own "ceiling."

Mr Gou refused to admit it, but in his response, "fleet splitting" is undoubtedly one of the most imaginative.

In accordance with Hon Hai's restructuring plan to split its business structure, Mr. Gou made a special arrangement for the first batch of 3 "medium ships", such as connectors, nanotubes and plastic materials, to be spun off. These three parts are the highest quality assets of Hon Hai, and some analysts believe the split was meant to allow the three separate listings in the future.

Although not large, 2012 revenue of about 80 billion NT dollars, accounting for the overall revenue of Hon Hai only 2%, but the connector cause group (FIT) is Hon Hai's most core competitiveness of the cause, Gou not only from the connector fortune, fit gross profit margin is also higher than the OEM Apple Business IDPBG cause group.

According to Mr. Gou, at present, fit capacity 40% supply Hon Hai Internal, 60% supply external customers, with a number of patents, future independence, fit can also be charged to the outside royalties. Mr. Gou said fit revenue is currently ranked first in the mainland and is confident of being the world's first in 3 years.

Fit General manager Lu Songzing also said that next year fit revenue will have the opportunity to challenge the NT dollar mark of hundreds of billions of dollars.

Hon Hai's Tianjin Fu na source of the company's carbon nanotubes technology, is the world's first carbon nanotubes to commercialize and will be profitable enterprises.

Mr. Gou said Hon Hai's applications include all touch-screen products, and the company has made 2000 patents in this area, and will have a large listing of new products before the end of 2013, not only has the revenue contribution, but also can profit by the end of the year. Mr Gou was so bullish on the business that he thought he could continue to spin out 5~10 's listed companies in the future.

As for plastic technology, including glue, tape, etc., although it is a traditional industry, but in conjunction with the new technology, will produce many new applications. For example, the current mobile phones and other products emphasize thin, no longer use screws, so switch to special glue. Hon Hai's current production of glue, not only can replace the United States manufacturers, improve product yield, but also reduce waste, save labor, even the narrow panel of glue has been successfully developed, in the future in touch, thin film soft wear products, the relevant special glue application will also be greatly increased.

Mr Gou further said Hon Hai had at least 50 subsidiaries in the market, and Hon Hai would be transformed from an aircraft carrier into an "air combat group".

"It's possible, of course, but Hon Hai's FIH (2038.HK), a spin-off of the mobile-phone generation industry, has few rivals. A personage in the industry who declined to be named said he had come to realize the efficiency of the large scale of Hon Hai and the excessive management level from Mr Gou's break-up. Moreover, to attract and nurture and retain a new generation of senior executives, corporate spin-off is a "stone" strategy: both reduce the risk of management, but also better to the enterprise surplus capacity to market.

But Mr Gou has repeatedly stressed in the meeting that the restructuring action is "a restructuring of the business" The main reason is that the core competitiveness of Hon Hai has been adjusted, but the company will still hold a majority stake, will not dilute its shareholders ' rights and interests, only partially open its employees ' shares, increase the centripetal force of its employees, and in the future, before these spin-off companies go public, " Spending 13 years on the money of Hon Hai shareholders, of course, let the old shareholders first recognize the shares.

Electrical business: death and repentance?

Compared with "split", the other performance of Hon Hai is difficult to reassure shareholders.

Take the example of improving automation. Three years ago the High-profile "million-robot" army, progress is rather slow. ' The robot is doing very well at the moment, ' Mr. Gou said. But the "three-year million army" has been adjusted for medium-and long-term goals, the current Hon Hai factory to use only more than 20,000 manipulator, distance 1 million is far from: the current hand movements, to grasp the connector, grasp the soft board, there are some meticulous action, the manipulator has not been able to do, Some smart software is also being developed.

In addition, because of the current effect of getting rid of Apple dependence is not obvious, and Metro and other cooperation of the city "hit the Rocks", steam plan will also stop, determined to make Hon Hai into the technology of Hon Hai, the service of the Hon Hai Gou How to exert force, also become a problem.

"Hon Hai will not do so many stores in the future," Mr Gou responded. The only thing to do is the experience Pavilion, E-commerce is the last mile, because China's business environment without the United States, Europe mature, so Hon Hai million horse plan is to put a few horses out, found that the horse will be recovered. He stressed that the horse is in, but "million horse" will become "small King Kong."

This is the first time Mr Gou has responded to his steam plan, prior to that, Mr. Gou's special Assistant to the Chairman of the Woo, the director of the Access division, said he would open 2000 stores at the end of 2012, actually out of the shop only 200, and most of the losses, simply powerless with the cat, Beijing East, Suning and other competition.

But Mr Gou, who has failed to fight the war in the path, is neither discouraged nor abandoned, citing, for example, the recent cooperation between Hon Hai and the United Super (2912.TW) in 7-11 of entities and online shopping malls. Mr Gou even said once again that it would take another 1 years for Hon Hai to get through "the second lieutenant" from manufacturing to customer service.

Knowing that Hon Hai does not have commercial circulation genes, several times fail Mai still dare to put such a "satellite", Gou is clearly see the current domestic electric business competition "full business platform" trend, so the Foxconn's electronic products with 7-11 supermarket industry, play a heartbeat.

The problem is in the areas of access and electricity, and Mr Gou sees the trend every time, but fails to succeed every time. Hon Hai's pathway gene deficiency syndrome can be "cured" through cooperation with the United Super, and there are many variables.

As for the contract, which was extended to 2015, Mr. Gou said: "The relationship between Hon Hai and Japan Sharp is still in, also talk about, this part has not changed, now is their urgent, not our urgent, Hon Hai not urgent." ”

Mr Gou reluctantly said that over the past year, Hon Hai has been the only person to negotiate, but Sharp's negotiators have changed 4, Hon Hai can not say that they are innocent, can only be described as helpless.

"Hon Hai is the 40th year of its establishment and has been prosperity for at least 20 years after the transition." "Mr Gou is confident.