(Supp.to Oct. 12) disposal of Zhen Ding Shares

Foxconn (Far East) sold 5.54 million Zhen Ding shares, realising NT$2.68 billion profit.

What the company is saying

Foxconn (Far East) Limited, a subsidiary, completed the sale of 5,544,000 Zhen Ding Technology Holding Limited common shares between September 1 and October 12, 2026. The average sale price was NTD584.96 per share, generating total proceeds of NTD3,243,036,000 and a gain on disposal of NT$2,682,907,155. The company frames this transaction as a move to realise investment profits, explicitly stating this as the purpose. After the sale, Foxconn (Far East) retains 299,971,627 Zhen Ding shares, valued at NTD42,743,253,899, representing a 26.47% stake. The company emphasises that there are no restrictions or pledges on these holdings and that the counterparty is an equity-method investee, not a related party. No dissenting opinions from directors were recorded, and the announcement maintains a strictly factual and neutral tone.

What the data suggests

The sale of 5,544,000 Zhen Ding shares at an average price of NTD584.96 per share resulted in proceeds of NTD3,243,036,000 and a realised gain of NT$2,682,907,155. Post-transaction, Foxconn (Far East) continues to hold a significant 26.47% stake in Zhen Ding, amounting to 299,971,627 shares valued at NTD42,743,253,899. The investment in Zhen Ding now represents 10.13% of the company's total assets and 20.59% of owners' equity, based on the most recent financial statement. The current working capital position is negative at NTD -317,913,506 (in thousands), indicating a liquidity constraint. The transaction is fully realised, with no forward-looking projections, and the disclosure provides all relevant figures for the trade and post-sale position. No comparative or trend data is included, so the broader impact on financial trajectory cannot be assessed from this announcement alone.

Analysis

The announcement is a factual disclosure of a completed equity disposal transaction, with all key claims supported by specific numerical data (shares sold, price, proceeds, gain, post-transaction holdings, and relevant ratios). There are no forward-looking statements, projections, or aspirational claims; all information pertains to realised events and current financial positions. The language is strictly descriptive, with no promotional or exaggerated phrasing. The stated purpose ('realization of investment profits') is a direct explanation of the transaction, not an inflated claim about future benefits. No large capital outlay is paired with uncertain or long-dated returns, as the transaction is already completed and its financial impact is quantified. The disclosure is proportionate and transparent, with no evidence of narrative inflation.

Risk flags

• ●The company's working capital is negative at NTD -317,913,506 (in thousands), which could signal short-term liquidity pressure and may affect operational flexibility or require further asset sales or financing.
• ●Despite the sale, Foxconn (Far East) retains a large exposure to Zhen Ding, with a 26.47% stake valued at NTD42,743,253,899, meaning its balance sheet remains materially tied to the performance of this single equity holding.
• ●No information is provided on how the realised gains will be deployed or whether the disposal is part of a broader capital allocation or risk management strategy, limiting visibility into future financial direction or use of proceeds.

Bottom line

Foxconn (Far East) Limited has monetised a portion of its Zhen Ding Technology Holding Limited stake, generating NT$2.68 billion in profit from a sale of 5.54 million shares. The transaction is fully completed, with proceeds and gains already realised, and the company continues to hold a substantial 26.47% stake in Zhen Ding. While the disposal strengthens reported profits, the company’s working capital remains negative, raising questions about liquidity and the potential need for further asset sales or financing. The announcement is transparent about the transaction's specifics but does not disclose how the proceeds will be used or whether this is part of a larger strategic shift. Investors should focus on the company’s ongoing exposure to Zhen Ding and monitor for further updates on capital deployment or liquidity management. The key takeaway is that this is a realised gain, not a forward-looking projection, but the underlying financial pressures remain unresolved.

Announcement summary

(LSE:HHPD) Hon Hai Precision Industry Co Ltd announced the disposal of Zhen Ding Technology Holding Limited common shares on behalf of its subsidiary Foxconn (Far East) Limited. The transaction involved the sale of 5,544,000 shares of Zhen Ding Technology Holding Limited between 2026/09/01 and 2026/10/12 at an average unit price of NTD584.96 per share, resulting in a total monetary amount of NTD3,243,036,000. The gain on disposal from this transaction was NT$2,682,907,155. After the disposal, the cumulative amount of Zhen Ding shares held by the company (excluding the current trade) is 299,971,627 shares, with a cumulative monetary amount held of NTD42,743,253,899 and a shareholding percentage of 26.47%. There are no restrictions of rights, such as pledges, on these holdings. The ratio of this securities investment (including the current trade) to total assets is 10.13%, and the ratio to owners' equity is 20.59%, based on the most recent financial statement. The working capital as of the present is NTD -317,913,506 (in thousands). The concrete purpose of the disposal is the realization of investment profits. The counterparty in this transaction is an equity-method investee of the company and is not a related party. There were no dissenting opinions from directors regarding this transaction. No ratification by supervisors or approval by the audit committee was required, and there are no other matters that need to be specified.

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