The company announced that it had no more than $77.4 million (540 million yuan) in direct holdings against 100% of its subsidiary, LITE-ON VIETNAM CO., LTD.. Cash capital increase, the main purpose of the capital is to establish its own plant.
In addition to strengthening the distribution of Southeast Asia, in order to implement the capital needs of its Middle East business, Genton announced an additional $20141602.17 (or about 140 million yuan) in cash for its subsidiary KBW-LITEON, plus the Vietnam case. The total amount is about 680 million yuan.
It is understood that the company originally set up subsidiaries in Vietnam and Jordan in the Middle East, and its Middle East is mainly because of winning local bids. The capital increase is mainly in line with the customers' nearby production and expanding production in response to the demand for orders. Mainland China is still the largest production base for Kuang Bao, accounting for nearly 80%. Due to the rapid rise in labor costs in the mainland in recent years and the increase in tariffs on products sold to the United States as a result of the trade war, the distribution of overseas production bases has been strengthened one after another this year.
The company has plants in Vietnam, Thailand, Mexico, the Philippines and Malaysia. Among them, Thailand has been established for nearly 30 years and Vietnam has a production base for five years. Southeast Asia is the largest manufacturing base outside mainland China.
In addition to strengthening the overseas layout, the Kaohsiung operating center and new plant, which will invest tens of billions of yuan (NT $) in 2016, will also open in the first quarter of next year. They will mainly produce automotive electronics products, including LED lights. Body control and vehicle image sensor module.
Chief Executive Chen Guangzhong pointed out that because of the trade war between China and the United States, customers are more uncertain about the terminal market, and customers are more nervous than Guangbao, including where suppliers buy and distribute goods. This situation is also reflected in the poor visibility of Guangbao orders. More conservative for the first quarter of next year.
Chen Guangzhong stressed that so far the increase in tariffs has affected less than 2 percent of Guangbao's revenue, and that the company's direct export to the United States has a lower proportion through capacity scheduling in different regions.