Hon Hai Precision Industry Co., Ltd.

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See more articles on 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 2019	TWD	USD
Revenue	5,342.81B	172,835.41M
Gross Profit	315,868.42M	10,218.07M
Operating income	114,896.88M	3,716.81M
Income before tax	144,243.89M	4,666.16M
Net income	115,308.73M	3,730.14M
EBITDA	181,905.74M	5,884.49M
Diluted EPS	8.23	0.26
Dividends Per Share	4.20	0.13
Total Assets	3,320.94B	110,782.99M
Total liabilities	1,918.27B	63,991.58M
Total equity	1,239.98B	41,364.52M
Operating cash flow	265,267.52M	8,581.18M
	Currency in TWD	Currency in USD

Historical Data

TWD | USD

	Dec 2015	Dec 2016	Dec 2017	Dec 2018	Dec 2019
Revenue	4,482.14B	4,358.73B	4,706.73B	5,293.80B	5,342.81B
Gross Profit	320,591.96M	321,584.98M	303,006.94M	332,029.90M	315,868.42M
Operating income	164,268.57M	174,939.50M	112,570.43M	136,146.87M	114,896.88M
Income before tax	194,129.97M	197,122.29M	172,055.87M	154,019.72M	144,243.89M
Net income	146,866.97M	148,662.98M	138,734.40M	129,065.10M	115,308.73M
EBITDA	235,107.03M	237,776.39M	173,002.89M	195,334.67M	181,905.74M
Diluted EPS	10.57	10.65	9.88	9.19	8.23
Dividends Per Share	4.54	5.62	2.50	4	4.20
Total Assets	2,308.29B	2,592.04B	3,407.21B	3,381.35B	3,320.94B
Total liabilities	1,243.49B	1,454.51B	2,232.87B	2,045.58B	1,918.27B
Total equity	1,007.62B	1,078.74B	1,083.12B	1,211.87B	1,239.98B
Operating cash flow	259,174.72M	190,685.52M	-18,834.07M	-25,748.60M	265,267.52M

	Dec 2015	Dec 2016	Dec 2017	Dec 2018	Dec 2019
Revenue	141,151.85M	135,151.15M	154,711.26M	175,556.20M	172,835.41M
Gross Profit	10,096.09M	9,971.37M	9,959.89M	11,010.97M	10,218.07M
Operating income	5,173.14M	5,424.34M	3,700.21M	4,514.98M	3,716.81M
Income before tax	6,113.54M	6,112.16M	5,655.50M	5,107.69M	4,666.16M
Net income	4,625.13M	4,609.58M	4,560.22M	4,280.13M	3,730.14M
EBITDA	7,403.99M	7,372.72M	5,686.63M	6,477.80M	5,884.49M
Diluted EPS	0.33	0.33	0.32	0.30	0.26
Dividends Per Share	0.14	0.17	0.08	0.13	0.13
Total Assets	70,274.29M	80,425.79M	114,495.58M	110,009.29M	110,782.99M
Total liabilities	37,857.30M	45,130.70M	75,033.31M	66,551.38M	63,991.58M
Total equity	30,676.46M	33,471.38M	36,397.05M	39,427.35M	41,364.52M
Operating cash flow	8,161.93M	5,912.58M	-619.07M	-853.89M	8,581.18M

Valuation Measures

Dec 2019
PER	10.91
ROA	3.44%
ROE	9.40%
Operating margin	2.15%
Profit margin	2.15%

Key executives

Chairman & Chief Executive Officer: Yang-wei Liu
Head-Finance & Deputy Spokesman: Te Tsai Huang
Associate Vice President: Jim Hung
Head-Accounting: Tsung Kai Chou
IR Contact: Chun Han Yang

Shareholders

KUO TAI MING /HONHAI/ (11.9%)
The Vanguard Group, Inc. (3.1%)
BlackRock Fund Advisors (1.8%)
GIC Pte Ltd. (Investment Management) (1.8%)
Hon Hai Precision Industry Co., Ltd. (1.3%)
Fidelity Management & Research Co. LLC (1.2%)
Cathay Life Insurance Co., Ltd. (Invt Port) (1.2%)
Fubon Life Insurance Co., Ltd. (1.2%)
Norges Bank Investment Management (1.1%)
Dimensional Fund Advisors LP (1.0%)

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-SCI Corporation
Jabil Inc.
Celestica Inc.
CommScope Holding Co., Inc.
Electric Connector Technology Co., Ltd. Class A
ASE Technology Holding Co., Ltd.
Universal Scientific Industrial (Shanghai) Co., Ltd. Class A
PT Sat Nusapersada Tbk
Boxlight Corp Class A
Hotron Precision Electronic Industrial Co. Ltd.
Applied Optoelectronics, Inc.
NETGEAR, Inc.
UDE Corp.
G-SHANK Enterprise Co., Ltd.
Arlo Technologies, Inc.
Kortek Corporation

Last Updated on 29 May, 2020