Preface

On the 23rd of this month, Taiwan Fu Hsing, a leader in the lock manufacturing industry, held its 2025 shareholders' meeting. The highlight of the meeting was the company's decision to distribute a record-high dividend of $3.1 per share in 2024, along with a 20% cash capital reduction, providing an additional $2 per share to shareholders for a total cash return of $5.1 per share.

Lazy bag

With a significant dividend increase and 20% capital reduction, Taiwan Fu Hsing aims to strengthen its financial structure, enhancing shareholder value while securing long-term growth through strategic global market expansion.

Main Body

Taiwan Fu Hsing Co., a prominent name in lock manufacturing, revealed impressive financial results for 2024, reflecting an after-tax net profit of NT$910 million, equating to a substantial earnings per share (EPS) of NT$4.83. In the recent shareholders' meeting, the board declared a historic high dividend of NT$3.1 per share, coupled with an approval of a 20% cash capital reduction, promising a total cash distribution to shareholders amounting to NT$5.1 per share.

Post the capital reduction, Taiwan Fu Hsing’s paid-up capital will be adjusted to NT$1.508 billion, a strategic move intended to refine the capital structure and fortify the company's overall financial health. This decision underscores the firm's commitment to maintaining a robust financial status while continuing to deliver stable profit margins.

For the fiscal year 2024, the company reported revenues of NT$8.039 billion and a gross margin of 23.76%, marking a year-on-year improvement of 1 percentage point. However, the after-tax net profit dipped by 3.99%, a testament to the challenging market environment. Despite this, the EPS stood stable at NT$4.83, demonstrating Taiwan Fu Hsing's ability to sustain profitability over the years.

During the meeting, Chairman Lin Jui-Chang emphasized the company's proactive approach in tackling global market changes. The strategy focuses on strengthening product development, strategically extending, and diversifying overseas market presence. Lin reiterated the company’s goal to foster sustainable long-term value for shareholders by maintaining a steady operational foundation.

Moreover, the company is making substantial advancements in its new production facility in Thailand, a project requiring an investment of $45 million. As Chairman Lin detailed, construction is well underway, with the facility anticipated to be completed by the end of 2025 and operations beginning in the first quarter of 2026. This site will emerge as a strategic addition to the existing production bases in Taiwan and China, enhancing the flexibility and competitiveness of the global supply chain.

In closing, Taiwan Fu Hsing spokesperson and CFO Li Kuo-Wei expressed that the near-70-year-old company has witnessed steady growth and profitable operations, leading to a significant cash reserve accumulation. After meticulous evaluation, the board decided to return a portion of this capital surplus to shareholders, ensuring operational security and smooth progression of overseas investment strategies. This capital deployment aims to improve capital utilization efficiency and shareholders’ return on equity (ROE), aligning with the company's philosophy of upholding corporate responsibility and prioritizing shareholder value.

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