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Electronic Technology

Hon Hai Precision Industry Co., Ltd.

Company Background

Hon Hai Precision Industry, the world's largest contract manufacturing company, employs more than 1 million workers in China, its main production base. The company produces smartphones, tablet computers and television sets for clients from around the world. It makes the most of its metal mold technology and low-cost production to deliver new products to customers fast.

The company was set up in 1974 by Chairman Terry Gou. After expanding operations through the connector business, it made a full-scale move into contract manufacturing in the 1990s. Business ties with Apple deepened in the 2000s, and the company grew rapidly thanks to orders from the U.S. electronics giant, primarily for smartphones.

Recently, however, Apple's growth has slowed. Hon Hai has thus been looking to diversify its operations. It entered the telecom market by winning a Taiwan fourth-generation high-speed mobile spectrum license in a 2013 auction. In contract manufacturing too, it aims at expanding the range of items it produces. In June this year, Hon Hai acquired a stake in the robotics subsidiary of Japan's SoftBank. Hon Hai is also looking to relocate some production to India and Southeast Asian countries because of rising labor costs in China. It is also stepping up efforts to automate production at plants by introducing industrial robots.

Chairman Gou is known as a charismatic business executive, but the absence of a successor to him is a problem for the company.

Business Summary

Hon Hai Precision Industry Co., Ltd. engages in the design, development and manufacturing of nanotechnology, heat transfer, wireless connectivity and material sciences products. Its products include cables, connectors, and personal computer components. The company was founded by Terry Gou on February 20, 1974 and is headquartered in New Taipei, Taiwan.

Financial Highlights

Dec 2020 TWDUSD
Revenue5,358.02B181,970.13M
Gross Profit302,918.72M10,287.77M
Operating income110,827.44M3,763.94M
Income before tax137,646.78M4,674.78M
Net income101,794.80M3,457.17M
EBITDA175,941.18M5,975.34M
Diluted EPS7.270.24
Dividends Per Share40.13
Total Assets3,674.27B130,766.44M
Total liabilities2,195.53B78,138.32M
Total equity1,297.27B46,169.73M
Operating cash flow384,203.05M13,048.37M
Currency in TWDCurrency in USD

Historical Data

 Dec 2016Dec 2017Dec 2018Dec 2019Dec 2020
Revenue 4,358.73B 4,706.73B 5,293.80B 5,342.81B 5,358.02B
Gross Profit 321,584.98M 303,006.94M 332,029.90M 315,868.42M 302,918.72M
Operating income 174,939.50M 112,570.43M 136,146.87M 114,896.88M 110,827.44M
Income before tax 197,122.29M 172,055.87M 154,019.72M 144,243.89M 137,646.78M
Net income 148,662.98M 138,734.40M 129,065.10M 115,308.73M 101,794.80M
EBITDA 237,776.39M 173,002.89M 195,334.67M 181,905.74M 175,941.18M
Diluted EPS 10.65 9.88 9.19 8.23 7.27
Dividends Per Share 5.62 2.50 4 4.20 4
Total Assets 2,592.04B 3,407.21B 3,381.35B 3,320.94B 3,674.27B
Total liabilities 1,454.51B 2,232.87B 2,045.58B 1,918.27B 2,195.53B
Total equity 1,078.74B 1,083.12B 1,211.87B 1,239.98B 1,297.27B
Operating cash flow 190,685.52M -18,834.07M -25,748.60M 265,267.52M 384,203.05M
 Dec 2016Dec 2017Dec 2018Dec 2019Dec 2020
Revenue 135,151.15M 154,711.26M 175,556.20M 172,835.41M 181,970.13M
Gross Profit 9,971.37M 9,959.89M 11,010.97M 10,218.07M 10,287.77M
Operating income 5,424.34M 3,700.21M 4,514.98M 3,716.81M 3,763.94M
Income before tax 6,112.16M 5,655.50M 5,107.69M 4,666.16M 4,674.78M
Net income 4,609.58M 4,560.22M 4,280.13M 3,730.14M 3,457.17M
EBITDA 7,372.72M 5,686.63M 6,477.80M 5,884.49M 5,975.34M
Diluted EPS 0.33 0.32 0.30 0.26 0.24
Dividends Per Share 0.17 0.08 0.13 0.13 0.13
Total Assets 80,425.79M 114,495.58M 110,009.29M 110,782.99M 130,766.44M
Total liabilities 45,130.70M 75,033.31M 66,551.38M 63,991.58M 78,138.32M
Total equity 33,471.38M 36,397.05M 39,427.35M 41,364.52M 46,169.73M
Operating cash flow 5,912.58M -619.07M -853.89M 8,581.18M 13,048.37M

Valuation Measures

Dec 2020
PER12.52
ROA2.91%
ROE8.02%
Operating margin2.06%
Profit margin1.89%

Key executives

  • Chairman & Chief Executive Officer: Yang-wei Liu
  • Head-Finance & Deputy Spokesman: Te Tsai Huang
  • Deputy General Manager: Wei Ming Chen
  • Associate Vice President: Jim Hung
  • Manager: Yi Hsiung Chou

Shareholders

  • KUO TAI MING /HONHAI/ (12.5%)
  • The Vanguard Group, Inc. (2.6%)
  • BlackRock Fund Advisors (2.1%)
  • GIC Pte Ltd. (Investment Management) (1.8%)
  • Fidelity Management & Research Co. LLC (1.7%)
  • Labor Pension New Fund (1.6%)
  • Norges Bank Investment Management (1.2%)
  • Hon Hai Precision Industry Co., Ltd. (1.0%)
  • Fubon Life Insurance Co., Ltd. (1.0%)
  • Schroder Investment Management Ltd. (0.7%)

Contact Details

  • Website:http://www.honhai.com.tw
  • Address: No. 2 Tzu Yu Street, Tucheng District, New Taipei, 236 78, Taiwan
  • Phone: +886.2.2268.3466

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Competitors

  • Benchmark Electronics, Inc.
  • Sanmina Corporation
  • Lotes Co., Ltd
  • Electric Connector Technology Co., Ltd. Class A
  • Celestica Inc.
  • ASE Technology Holding Co., Ltd.
  • Jabil Inc.
  • Universal Scientific Industrial (Shanghai) Co., Ltd. Class A
  • PT Sat Nusapersada Tbk
  • Global Brands Manufacture Limited
  • Wistron Corporation
  • Super Micro Computer, Inc.
  • NETGEAR, Inc.
  • UDE Corp.
  • Hotron Precision Electronic Industrial Co. Ltd.
  • Boxlight Corporation Class A
  • Applied Optoelectronics, Inc.
  • Ledtech Electronics Corp.
  • G-SHANK Enterprise Co., Ltd.
  • Arlo Technologies, Inc.
  • Kortek Corporation
Last Updated on 27 Oct, 2021

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