Sharp Corp. said Tuesday trade frictions between the United States and China could provide an "opportunity" to expand its business with Chinese companies, in contrast to many other manufacturers who have voiced concerns.
Sharp CEO and Chairman Tai Jeng-wu said in a news conference the U.S.-China trade dispute would have only a "small" impact on its operations. While 68 percent of its products are manufactured in China, only 3.8 percent of them, including personal computers and printers, are produced for the U.S. market, he said.
The company plans to shift production of its computers, produced by its subsidiary Dynabook Inc., from China to Vietnam and Taiwan, Tai said, after the United States unveiled a plan in mid-May to slap tariffs of up to 25 percent on $300 billion worth of Chinese products, including laptop computers.
As some of Sharp's corporate clients may be affected by the U.S. tariffs, the company expects a 1.2 percent fall in group sales for the current business year through next March, according to the chief executive, who was sent from the Taiwanese parent Hon Hai Precision Industry Co. in 2016 to revive the struggling Japanese display manufacturer.
(Sharp CEO and Chairman Tai Jeng-wu speaks at a news conference in Tokyo on June 11, 2019.)
Executive Vice President Yoshihisa Ishida also talked about Sharp's business strategy at the press conference, saying the company is looking for new opportunities to expand business-to-business operations.
Regardless of the trade war between the world's two largest economies, "Chinese companies are expected to expand their businesses elsewhere such as in Japan. Such moves are already apparent, so we are trying to expand our business by supplying new products to them," Ishida said.
"We view the U.S.-China trade frictions not as a risk or a danger but as an opportunity," he said.
Sharp also said Tuesday it would complete on June 21, a buyback of preferred shares worth 97.07 billion yen ($893 million) issued to Mizuho Bank and MUFG Bank, which invested a total of 200 billion yen in Sharp through a debt-for-equity swap bailout in 2015.
Sharp bought back and wrote off 85.1 billion yen of preferred stocks in January. These shares do not carry voting rights but typically provide higher dividend yields.
Sharp's 200 billion yen of preferred shares can be converted to common stocks on July 1.
"We are happy that we would be able to write off the preferred stocks in three years," Ishida said.
Tai reiterated his intention to stay on as chairman until the end of fiscal 2021, and look for his successor from both outside and within the company. "I still have not found the appropriate person," he added.
He said he would take on an executive role at Hon Hai on a part-time basis. Tai was once considered to be among potential candidates to replace Hon Hai chairman Terry Gou, who has thrown his hat in the ring for Taiwan's next presidential election.