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Electronics Production | September 11, 2007

Foxconn sales surge 29% in 1H07

Hon Hai Precision Industry Co., Ltd. also known as Foxconn, reported continued strong growth for the first half of 2007.
Comparing the first six months of 2007 with the same period in 2006, net sales surged by 29% to NT$ 711.2 billion; Net income gained by 32% to NT$ 31.2 billion. Gross profit surged 24% to NT$ 70.2 billion – gross profit margin eased to 9.9% from 10.2%

Looking forward, on the competitive advantage front, while steadfastly expanding the eCMMS coverage in mechanical, optical and electrical integration, the company had also kicked off an effort to unearth its huge hidden wealth from intangibles. On the industry trend front, the Company unwaveringly embracing the age of digital convergence through the unique “Share the Platform" Muster and Alliance initiatives; Company appreciates these expanding groups of worldwide peers who sign onto the grand vision of making comfort of electronic products usage an attainable reality for all mankind. Together with these partners, Company was able to further raised the bar of its legendary ability to support and uncompromising commitment to customers.

"Results for the first half were as expected and we continue to see regular seasonality," said Edmund C.A. Ding, Spokesperson. "Furthermore, we are especially proud with our accomplishments thus far in maximizing our shareholders' value and promote and assure social and environmental responsibility as a priority in a total supply chain initiative. Being a proud member of EICC, we are striving to revolutionize the manufacturing services providing industry again, only this time is to reach for not only the best speed, quality, engineering services, flexibility and cost, but also the best social and environmental responsibility standard to maximize our stakeholders' value at the same time.“

Table 1
Summary Consolidated Statement of Income (Expressed in Millions of NT Dollars)



Net Sales:
The Company's net sales for 1H07 jumped by 29% to NT$ 711.2 billion from NT$ 552.2 billion for 1H06.

Gross Profit (net) and Gross Margin: Due to continual outsize growth in system integration projects, the Company's gross profit (net) for 1H07 exploded by 24% to NT$ 70.2 billion from NT$ 56.4 billion for 1H06 even when, as a percentage of net sales, gross profit (net) retreated to 9.9% from 10.2%.

Operating Expenses: The Company's operating expenses for 1H07 increased by 26% to NT$ 30.3 billion from NT$ 24.0 billion for 1H06. As a percentage of net sales, operating expenses further diminished to 4.3% from 4.4% due to Company's increasing superior economy of scale and operational efficiency.

Operating Income and Operating Margin:
Principally as a result of the foregoing factors, the Company's operating income for 1H07 rocketed by 23% to NT$ 39.8 billion from NT$32.3 billion for 1H06. As a percentage of net sales, operating income retreated to 5.6% from 5.9%.

Non-Operating Income and Expenses: The Company's non-operating income for 1H07 surged by 78% to NT$ 6.2 billion from NT$ 3.4 billion for 1H06.

The Company's non-operating expenses for 1H07 increased by 164% to NT$ 4.4 billion from NT$ 1.6 billion for 1H06.As a percentage of net sales, non-operating expenses increased to 0.6% from 0.3 %.

Income Before Income Tax: Principally as a result of the foregoing factors, the Company's income before income tax leaped by 22% to NT$ 41.6 billion for 1H07 from NT$ 34.1 billion for 1H06. As a percentage of net sales, income before income tax decreased to 5.9% from 6.2%.

Net Income and Net Margin: Principally as a result of the foregoing factors, the Company's net income swelled by 32% to NT$ 31.2 billion for 1H07 from NT$ 23.7 billion for 1H06 despite net income increased to 4.4% from 4.3% as percentage of net sales.

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