Hi-P Pegs Aspirations on Rise of Digital Economy

Hi-P is a globally leading integrated contract manufacturer for consumer electronic components and products with 13 manufacturing plants worldwide. (Photo: Company)

At 77, Yao Hsiao Tung cuts a sprightly figure. Beneath his unassuming demeanour lies an indomitable will and razor-sharp mind.

The Executive Chairman of SGX-listed electronics contract manufacturer Hi-P International Ltd attributes his trademark resilience to his growing up years, when he was bullied constantly.

"Because my father changed jobs frequently, we relocated a lot. Whichever school I went to, I was seen as an outsider and always bullied," China-born and Taiwan-raised Yao recalled.

"But the more I was bullied, the more adaptable and resilient I became."

For the graduate of National Kaohsiung University of Applied Sciences, an old Chinese proverb about one's fighting spirit - 没有不景气, 只有不争气 (mei you bu jing qi, zhi you bu zheng qi) - resonates deeply.

It means no economic downturn can prevail if one has sufficient determination and resolve.

Armed with nothing but tenacity, Yao started his career in the precision tooling and plastic injection molding industry in 1972 by applying for, and landing, a job with US conglomerate DuPont.

"There was no one to teach me the ropes, so I had to learn everything about tool design from scratch. In those early years, I literally worked from dawn to dusk."

In 1979, Yao was transferred to Singapore by his employer. That was when he started learning English. "At the time, I had virtually no knowledge of spoken English. But I had to make cold calls to customers, so I was forced to pick up the language."

Eleven years later, Yao joined Hi-P International as Managing Director. He was appointed Group Executive Chairman and Chief Executive Officer in 2003.

Those were tumultuous years, as regional economies reeled from the fallout of the Global Financial Crisis. "It was very difficult to hire tooling experts, and the company was losing money. There were also disagreements between the partners about strategy," he recalled.

But Yao persevered. Through sheer grit and focused execution, he transformed Hi-P from a tooling house in the 1990s into a components manufacturer in 2000, and some years later, a full-fledged electronics contract manufacturer.

- Yao Hsiao Tung
Executive Chairman
Hi-P International

Yao has a three-pronged strategy to keep Hi-P on a growth trajectory - developing the right values, determining the Group's goals and direction, and exercising self-discipline through the execution process.

These principles are detailed in his book - aptly entitled "Aspiration" and dedicated to "All Enterprising and Ambitious Chinese People" - published in 2005.

Last year, Hi-P returned to the black - swinging to an attributable net profit of S$54.5 million from an attributable loss of S$45.4 million in 2015. As at 30 September 2017, it had grown its cash and cash equivalents to S$296.9 million, from S$120.7 million as at 31 December 2016.

The Group has forecast higher revenue and earnings for the current fourth quarter, as well as the financial year ending 31 December 2017.

In the year-to-date, Hi-P shares have tripled in value - surging 265% - while the benchmark Straits Times Index (STI) and FTSE ST All-Share Index have gained 18.1% and 17.7% respectively in the same period.

Looking ahead, Yao expects Hi-P to grow at a fairly rapid clip, driven by increased projects from new customers, as well as existing customers, in the wireless and Internet of Things (IoT) segments.

The Group plans to explore merger and acquisition opportunities in the medical and automotive sectors, as well as expand into markets such as the Eurozone, Japan, and China. "We're very US-centric right now," he added.

According to IDC, global smartphone shipments are expected to rise 1.7% year-over-year to 1.5 billion units in 2017, and grow by a compounded annual rate (CAGR) of 3.3% to 1.73 billion units by 2021.

Global spending on IoT is also projected to rise 16.7% in 2017, reaching over US$800 billion in total expenditure, while the worldwide wearables market is forecast to expand 16.6% this year, IDC noted.

"At 77, I'm more ambitious than ever about what the Group can achieve," said Yao, who is Hi-P's single largest shareholder with an 83% stake.

"My passion is to leave a legacy on earth - and that legacy is my story, which I'm writing every day. I'm full of confidence that the future of Hi-P will be even brighter than it is today."

- Yao Hsiao Tung
Executive Chairman
Hi-P International

• Taking into account the industry outlook for the smartphone, Internet of Things (IoT) and consumer electronics markets, as well as to overcome industry and business challenges, the Group will maintain its focus on: Enhancing capacity utilisation and driving manufacturing yield improvement
  • Increasing automation across all manufacturing locations
  • Tightening cost controls and improving operational efficiency to adopt a leaner business model
  • Intensifying business development efforts to further diversify the Group's customer base
  • Exploring growth opportunities that are synergistic to the Group's operations
• The Group continues to strive for sustainable growth and to be one of the top contract manufacturers in Asia by providing one-stop, dedicated solutions to fulfill its customers' needs - from product development and component manufacturing to complete product assembly.
• Barring unforeseen circumstances, the Group's performance guidance is as follows:
  • The Group expects higher revenue and profit for 4Q 2017 as compared to 4Q 2016 and 3Q 2017.
  • The Group expects higher revenue and profit for 2H 2017 as compared to 1H 2017.
  • The Group expects higher revenue and profit for FY 2017 as compared to FY 2016.