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 manufacturing, sales, and service of various connectors, chassis, radiators, wired or wireless communication products, optical products, power supply modules, application module assembly products, and network cable assembly products involved in the information, communication, automation equipment, precision machinery, automobile, and consumer electronics industries. It operates through the following product segments: Smart Consumer Electronics, Cloud and Networking Products, Computing Products, and Components and Others. The Smart Consumer Electronics segment includes smartphones, televisions, and game consoles. The Cloud and Networking Products segment focuses on servers and communication network. The Computing Products is involved in computers and tablets. The Components and Others segment offers connectors, mechanical parts, and services. The company was founded by Tai Ming Kuo on February 20, 1974 and is headquartered in New Taipei, Taiwan.

Financial Highlights

Dec 2022	TWD	USD
Revenue	6,626.99B	222,285.71M
Gross Profit	400,085.15M	13,419.83M
Operating income	173,787.84M	5,829.27M
Income before tax	181,738.69M	6,095.96M
Net income	141,482.71M	4,745.67M
EBITDA	249,390.14M	8,365.15M
Diluted EPS	10.05	0.33
Dividends Per Share	5.30	0.17
Total Assets	4,133.97B	134,501.61M
Total liabilities	2,477.80B	80,616.90M
Total equity	1,450.54B	47,194.44M
Operating cash flow	132,993.58M	4,460.93M
	Currency in TWD	Currency in USD

Historical Data

TWD | USD

	Dec 2018	Dec 2019	Dec 2020	Dec 2021	Dec 2022
Revenue	5,293.80B	5,342.81B	5,358.02B	5,994.17B	6,626.99B
Gross Profit	332,029.90M	315,868.42M	302,918.72M	362,127.04M	400,085.15M
Operating income	136,146.87M	114,896.88M	110,827.44M	148,959.49M	173,787.84M
Income before tax	154,019.72M	144,243.89M	137,646.78M	175,167.02M	181,738.69M
Net income	129,065.10M	115,308.73M	101,794.80M	139,320.33M	141,482.71M
EBITDA	195,334.67M	181,905.74M	175,941.18M	224,440.65M	249,390.14M
Diluted EPS	9.19	8.23	7.27	9.91	10.05
Dividends Per Share	4	4.20	4	5.20	5.30
Total Assets	3,381.35B	3,320.94B	3,674.27B	3,908.87B	4,133.97B
Total liabilities	2,045.58B	1,918.27B	2,195.53B	2,330.88B	2,477.80B
Total equity	1,211.87B	1,239.98B	1,297.27B	1,380.45B	1,450.54B
Operating cash flow	-25,748.60M	265,267.52M	384,203.05M	-67,612.73M	132,993.58M

	Dec 2018	Dec 2019	Dec 2020	Dec 2021	Dec 2022
Revenue	175,556.20M	172,835.41M	181,970.13M	214,599.81M	222,285.71M
Gross Profit	11,010.97M	10,218.07M	10,287.77M	12,964.65M	13,419.83M
Operating income	4,514.98M	3,716.81M	3,763.94M	5,332.95M	5,829.27M
Income before tax	5,107.69M	4,666.16M	4,674.78M	6,271.22M	6,095.96M
Net income	4,280.13M	3,730.14M	3,457.17M	4,987.86M	4,745.67M
EBITDA	6,477.80M	5,884.49M	5,975.34M	8,035.28M	8,365.15M
Diluted EPS	0.30	0.26	0.24	0.35	0.33
Dividends Per Share	0.13	0.13	0.13	0.18	0.17
Total Assets	110,009.29M	110,782.99M	130,766.44M	141,283.06M	134,501.61M
Total liabilities	66,551.38M	63,991.58M	78,138.32M	84,247.68M	80,616.90M
Total equity	39,427.35M	41,364.52M	46,169.73M	49,895.44M	47,194.44M
Operating cash flow	-853.89M	8,581.18M	13,048.37M	-2,420.63M	4,460.93M

Valuation Measures

Dec 2022
PER	9.78
ROA	3.51%
ROE	9.99%
Operating margin	2.62%
Profit margin	2.13%

Key executives

Chairman, President & General Manager: Yang Wei Liu
Financial Director & Manager-Corporate Governance: Te Tsai Huang
Chief Information Security Officer: Wei Bin Lee
Vice President & Head-Semiconductor Business Group: Wei-Ming Chen
Deputy General Manager: Wei Ming Chen

Shareholders

KUO TAI MING /HONHAI/ (12.5%)
The Vanguard Group, Inc. (2.7%)
BlackRock Fund Advisors (1.9%)
Hon Hai Precision Industry Co., Ltd. (1.4%)
Yuanta Securities Investment Trust Co., Ltd. (1.2%)
Norges Bank Investment Management (1.0%)
Dimensional Fund Advisors LP (0.6%)
Schroder Investment Management Ltd. (0.5%)
Cathay Securities Investment Trust Co., Ltd. (0.5%)
BlackRock Advisors (UK) Ltd. (0.5%)

Contact Details

Website:http://www.honhai.com.tw
Address: No. 2 Tzu Yu Street, Tucheng District, New Taipei, 236 78, Taiwan
Phone: +886.2.22683466

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Last Updated on 31 May, 2023