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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 2019 TWDUSD
Revenue5,342.81B172,835.41M
Gross Profit315,868.42M10,218.07M
Operating income114,896.88M3,716.81M
Income before tax144,243.89M4,666.16M
Net income115,308.73M3,730.14M
EBITDA181,905.74M5,884.49M
Diluted EPS8.230.26
Dividends Per Share4.200.13
Total Assets3,320.94B110,782.99M
Total liabilities1,918.27B63,991.58M
Total equity1,239.98B41,364.52M
Operating cash flow265,267.52M8,581.18M
Currency in TWDCurrency in USD

Historical Data

 Dec 2015Dec 2016Dec 2017Dec 2018Dec 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 2015Dec 2016Dec 2017Dec 2018Dec 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
PER10.91
ROA3.44%
ROE9.40%
Operating margin2.15%
Profit margin2.15%

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. (3.0%)
  • GIC Pte Ltd. (Investment Management) (1.8%)
  • BlackRock Fund Advisors (1.8%)
  • Hon Hai Precision Industry Co., Ltd. (1.3%)
  • Cathay Life Insurance Co., Ltd. (Invt Port) (1.2%)
  • Fubon Life Insurance Co., Ltd. (1.2%)
  • Fidelity Management & Research Co. LLC (1.2%)
  • 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

  • Benchmark Electronics, Inc.
  • Sanmina-SCI Corporation
  • Jabil Inc.
  • Lotes Co., Ltd
  • 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
  • Wistron Corporation
  • Hotron Precision Electronic Industrial Co. Ltd.
  • Boxlight Corp Class A
  • Applied Optoelectronics, Inc.
  • NETGEAR, Inc.
  • UDE Corp.
  • G-SHANK Enterprise Co., Ltd.
  • Arlo Technologies, Inc.
Last Updated on 7 Aug, 2020

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