Business Context and Reporting Period
This Form 6-K, filed on July 15, 2015, contains the minutes of the 2015 Annual Shareholders' Meeting of Advanced Semiconductor Engineering, Inc. (ASE), held on June 23, 2015. ASE is a leading provider of semiconductor packaging and testing services. The filing details the ratification of 2014 financial statements, the approval of the 2014 earnings distribution, and significant corporate governance changes, including the replacement of the board of supervisors with an audit committee.
Key Financial Metrics (Fiscal Year 2014)
| Metric | 2014 Value (NT$) | 2014 Value (US$) |
|---|---|---|
| Consolidated Revenue | 256,591,447,000 | 8,119,983,000 |
| Operating Profit | 29,874,484,000 | 945,395,000 |
| Net Profit (Consolidated) | 22,869,101,000 | 723,706,000 |
| Net Profit Attributable to Owners | 22,228,602,000 | 703,437,000 |
| Basic Earnings Per Share | NT$ 2.89 | US$ 0.09 |
| Basic Earnings Per ADS | NT$ 14.46 | US$ 0.46 |
| Total Assets | 333,718,817,000 | 10,560,722,000 |
| Total Liabilities | 178,027,423,000 | 5,633,779,000 |
| Cash and Cash Equivalents | 51,694,410,000 | 1,635,899,000 |
| Short-term Borrowings | 41,176,033,000 | 1,303,039,000 |
| Long-term Borrowings | 24,104,424,000 | 762,798,000 |
| Current Ratio | 144% | N/A |
Material Changes vs. Prior Period
- Revenue Growth: Consolidated revenue increased by 16.7% (NT$ 36.7 billion) compared to 2013, driven by a 16% growth in advanced packaging and 15% growth in copper wire bonding.
- Profitability: Operating profit grew approximately 34% year-over-year. After-tax net profit increased by approximately 50% compared to the previous year.
- Balance Sheet: Total assets grew from NT$ 286.7 billion in 2013 to NT$ 333.7 billion in 2014. Cash and cash equivalents increased by NT$ 6.7 billion.
- Dividend Policy: The company proposed a cash dividend of NT$ 2.00 per share for 2014, totaling NT$ 15.6 billion. This was approved by shareholders despite some shareholder concerns regarding the yield being lower than competitors.
Guidance, Outlook, and Corporate Actions
- 2015 Outlook: Management projects global semiconductor sales to grow 5.4% in 2015. ASE aims to increase the revenue portion from System Level Packaging (SiP) from 18% to 30% and continue expanding copper wire bonding adoption.
- Capital Raising Authorization: Shareholders authorized the Board to raise capital via:
- Issuance of up to 500 million common shares and/or Depositary Receipts (DRs).
- Domestic cash capital increase of up to 500 million shares.
- Private offering of foreign convertible corporate bonds up to NT$ 16 billion.
- Corporate Governance Restructuring: ASE replaced its board of supervisors with an Audit Committee consisting of all independent directors. The Board of Directors was expanded from 9 to 11 members (3 independent, 8 non-independent).
- Shareholder Concerns: Shareholders raised questions regarding environmental sanctions by the Kaohsiung Environmental Protection Bureau, ongoing litigation, and the performance of the company's real estate subsidiary in Shanghai. Management provided explanations but did not disclose specific financial impacts of these items in the minutes.
Investor Verification Checklist
- Environmental & Legal Risks: Verify the status and potential financial impact of the Kaohsiung Environmental Protection Bureau sanctions and the cases pending in the Kaohsiung High Administrative Court and Taiwan High Court.
- Real Estate Exposure: Assess the financial performance and strategic future of the Shanghai real estate subsidiary, which shareholders noted as performing poorly.
- Capital Dilution: Monitor the execution of the authorized capital increases (DRs, domestic shares, convertible bonds) and their potential dilution effect on existing shareholders.
- Dividend Yield: Compare the approved NT$ 2.00 dividend yield against industry peers to evaluate shareholder return competitiveness.
- Debt Structure: Review the terms of the proposed NT$ 16 billion convertible bond offering and its impact on the company's leverage ratios.