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Major Car Distributor Hotai to Distribute NT$12.6 in 2013 Cash Dividends

2014/06/27 | By Quincy Liang

N.K. Huang, chairman of auto distributor Hotai in Taiwan. (photo from UDN)
N.K. Huang, chairman of auto distributor Hotai in Taiwan. (photo from UDN)
Hotai Motor Co. Ltd., the agent of Toyotas and Lexus and top auto vendor in Taiwan for more than 10 years by market share, recently announced its board's decision to distribute cash dividends of NT$12.6 (US$0.42) for 2013, a record high in company history.

To better control its car sales network, Hotai's board also decided to pour NT$2.1 billion (US$70 million) to acquire a 20% stake in Central Motor Co., Ltd., Hotai's largest car distributor in central Taiwan.

N.K. Huang, Hotai's chairman, said at the  company's recent shareholders meeting that Hotai has topped all counterparts in the domestic market for the 12th consecutive year in 2013; while the company's reinvested auto assembly company Kuozui Motors Ltd., a joint venture between Hotai and Toyota Japan, also hit record export volume of 81,000 cars last year.

Due to supply shortage of new cars from Kuozui, Hotai suffered a Q1 revenue decline, but still reported net earnings per share (EPS) of NT$4.11 (US$0.14), higher year on year.

With new car supply from Kuozui normalizing, Hotai in the second quarter saw high sales growth in April and May. In the first five months, Hotai's revenue saw a 13% year-on-year (YoY) increase, with 2014 value expected to continue growing this year, thanks to smooth sales of both passenger cars and trucks/buses.

Hotai originally planned to distribute cash dividends of NT$9.5 (US$0.32), but the firm responded to shareholders' plea to cut in 2014  credit by 50%, and to increase the cash dividends to save on taxes. The company's spokesman F.L. Hsieh says that Hotai has kept accumulated earnings exceeding NT$10 billion (US$333.3 million), with the distribution of all 2013 corporate earnings not to affect operations but benefit investors.

Regarding the investment in Central Motor, Hsieh said that Hotai holds partial stake of all its distributors throughout Taiwan, to closely synchronize operational concepts of Hotai and distributors, as well as more effectively and efficiently exert synergies. The increasingly close ties between Hotai and its distributors, the distributor said, is likely to further raise   profitability.