CHT

Business Context and Reporting Period

This Form 6-K filing by Chunghwa Telecom Co., Ltd. (Taiwan) is dated June 10, 2022. The report primarily summarizes corporate governance actions taken during the 2022 Annual General Meeting (AGM) held on May 27, 2022, and subsequent Board of Directors resolutions. Additionally, it discloses unaudited operating results for the month of May 2022 and the five-month period ended May 31, 2022.

Key Financial Metrics

The filing provides unaudited consolidated financial data for May 2022 and the year-to-date (YTD) period ending May 31, 2022.

Dividend Information: The AGM ratified a cash dividend of NT$4.608 per share for 2021 earnings. The ex-dividend date is June 30, 2022, with distribution expected on August 5, 2022.

Capital Expenditures: The company announced a purchase of mobile broadband service equipment from Ericsson Taiwan Ltd. totaling NT$1.35 billion.

Derivatives: As of May 2022, the company held forward contracts for non-trading purposes. Outstanding positions totaled NT$599.01 million (NT$186.48 million non-hedge + NT$412.53 million hedge) with a combined fair value of approximately -NT$7.78 million.

Material Changes vs. Prior Period

• Revenue Growth: Net sales for May 2022 increased by 6.79% year-over-year (YoY) compared to May 2021. YTD net sales for the first five months of 2022 increased by 4.31% YoY.
• Board Composition: The 10th term of directors was elected. While the Chairman (Chi-Mau Sheih) and President (Shui-Yi Kuo) were re-elected, there were changes in the Ministry of Transportation and Communications (MOTC) representatives and independent directors due to term expirations.
• Committee Changes: The Compensation Committee and Audit Committee members were reconstituted following the expiration of previous terms. New independent directors were appointed to the Audit Committee.

Guidance, Outlook, and Corporate Actions

Management Commentary: The filing does not contain forward-looking guidance or specific management commentary regarding future market conditions beyond the standard disclosure of operating results.

Corporate Governance Actions:

• Leadership Appointments: Chi-Mau Sheih was re-elected as Chairman and appointed as CEO. Shui-Yi Kuo was re-appointed as President.
• Related Party Transactions: A subsidiary, Honghwa International Corporation, acquired a right-of-use asset (office premises) from the parent company for NT$210,240. The Board also approved a donation of NT$1.5 million to National Taiwan University.
• Non-Competition Restrictions: The AGM approved the release of non-competition restrictions for the newly elected directors, allowing them to hold positions in other entities.

Risks and Contingencies: The filing does not explicitly detail new material risks or contingencies beyond standard operational disclosures. The company noted no dissenting opinions from directors regarding the reported transactions.

Key Facts for Investor Verification

• Dividend Payout: Verify the record date (July 7, 2022) and distribution date (August 5, 2022) for the NT$4.608 per share cash dividend.
• Revenue Trend: Confirm the sustainability of the 6.79% monthly revenue growth and 4.31% YTD growth in the context of the broader telecommunications market.
• Capital Allocation: Monitor the impact of the NT$1.35 billion investment in Ericsson mobile broadband equipment on future depreciation and network capacity.
• Board Stability: Note the continuity of key executive leadership (Chairman/CEO and President) despite the rotation of independent directors and government representatives.
• Derivative Exposure: Review the fair value of outstanding forward contracts (approx. -NT$7.78 million) for potential currency or interest rate exposure impacts.