Hon Hai Precision Industry Co., Ltd.

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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 manufacture 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 Tucheng, Taiwan.

Financial Highlights

Dec 2018	TWD	USD
Revenue	5,293.80B	175,556.20M
Gross Profit	332,029.90M	11,010.97M
Operating income	136,146.87M	4,514.98M
Income before tax	154,019.72M	5,107.69M
Net income	129,065.10M	4,280.13M
EBITDA	195,334.67M	6,477.80M
Diluted EPS	9.19	0.30
Dividends Per Share	4	0.13
Total Assets	3,381.35B	110,009.29M
Total liabilities	2,045.58B	66,551.38M
Total equity	1,211.87B	39,427.35M
Operating cash flow	-25,748.60M	-853.89M
	Currency in TWD	Currency in USD

Historical Data

TWD | USD

	Dec 2014	Dec 2015	Dec 2016	Dec 2017	Dec 2018
Revenue	4,213.17B	4,482.14B	4,358.73B	4,706.73B	5,293.80B
Gross Profit	291,943.85M	320,591.96M	321,584.98M	303,006.94M	332,029.90M
Operating income	143,191.41M	164,268.57M	174,939.50M	112,570.43M	136,146.87M
Income before tax	171,140.35M	194,129.97M	197,122.29M	172,055.87M	154,019.72M
Net income	130,534.72M	146,866.97M	148,662.98M	138,734.40M	129,065.10M
EBITDA	213,423.26M	235,107.03M	237,776.39M	173,002.89M	195,334.67M
Diluted EPS	9.46	10.57	10.65	9.88	9.19
Dividends Per Share	4.11	4.54	5.62	2.50	4
Total Assets	2,462.71B	2,308.29B	2,592.04B	3,407.21B	3,381.35B
Total liabilities	1,474.07B	1,243.49B	1,454.51B	2,232.87B	2,045.58B
Total equity	930,231.23M	1,007.62B	1,078.74B	1,083.12B	1,211.87B
Operating cash flow	202,744.41M	259,174.72M	190,685.52M	-18,834.07M	-25,748.60M

	Dec 2014	Dec 2015	Dec 2016	Dec 2017	Dec 2018
Revenue	139,033.83M	141,151.85M	135,151.15M	154,711.26M	175,556.20M
Gross Profit	9,634.08M	10,096.09M	9,971.37M	9,959.89M	11,010.97M
Operating income	4,725.28M	5,173.14M	5,424.34M	3,700.21M	4,514.98M
Income before tax	5,647.59M	6,113.54M	6,112.16M	5,655.50M	5,107.69M
Net income	4,307.61M	4,625.13M	4,609.58M	4,560.22M	4,280.13M
EBITDA	7,042.92M	7,403.99M	7,372.72M	5,686.63M	6,477.80M
Diluted EPS	0.31	0.33	0.33	0.32	0.30
Dividends Per Share	0.13	0.14	0.17	0.08	0.13
Total Assets	77,929.07M	70,274.29M	80,425.79M	114,495.58M	110,009.29M
Total liabilities	46,645.04M	37,857.30M	45,130.70M	75,033.31M	66,551.38M
Total equity	29,435.83M	30,676.46M	33,471.38M	36,397.05M	39,427.35M
Operating cash flow	6,690.52M	8,161.93M	5,912.58M	-619.07M	-853.89M

Valuation Measures

Dec 2018
PER	7.60
ROA	3.80%
ROE	11.24%
Operating margin	2.57%
Profit margin	2.43%

Key executives

Chief Financial Officer: Huang Chiu-lien
Deputy General Manager: Yi Pin Chien
Director & Deputy General Manager: Fang Ming Lu
Head-Accounting: Tsung Kai Chou
Spokesman: Chih Ping Hsing

Shareholders

GOU TERRY (11.9%)
The Vanguard Group, Inc. (3.0%)
BlackRock Fund Advisors (1.9%)
GIC Pte Ltd. (Investment Management) (1.7%)
Hon Hai Precision Industry Co., Ltd. (1.4%)
Fubon Life Insurance Co., Ltd. (1.2%)
Fidelity Management & Research Co. (1.1%)
Saudi Arabian Monetary Agency (Investment Management) (1.1%)
Norges Bank Investment Management (1.1%)
Dimensional Fund Advisors LP (0.9%)

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

Sanmina-SCI Corporation
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Jabil Inc.
Celestica Inc.
Universal Scientific Industrial (Shanghai) Co., Ltd. Class A
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ASE Technology Holding Co., Ltd.
Arlo Technologies, Inc.
Boxlight Corp Class A
UDE Corp.
Guangdong Silver Age Sci & Tech Co., Ltd. Class A
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Aerospace Communications Holdings Co., Ltd. Class A
Kortek Corporation
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Last Updated on 9 Oct, 2019