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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 2021 TWDUSD
Revenue5,994.17B214,599.81M
Gross Profit362,127.04M12,964.65M
Operating income148,959.49M5,332.95M
Income before tax175,167.02M6,271.22M
Net income139,320.33M4,987.86M
EBITDA224,440.65M8,035.28M
Diluted EPS9.910.35
Dividends Per Share5.200.18
Total Assets3,908.87B141,283.06M
Total liabilities2,330.88B84,247.68M
Total equity1,380.45B49,895.44M
Operating cash flow-67,612.73M-2,420.63M
Currency in TWDCurrency in USD

Historical Data

 Dec 2017Dec 2018Dec 2019Dec 2020Dec 2021
Revenue 4,706.73B 5,293.80B 5,342.81B 5,358.02B 5,994.17B
Gross Profit 303,006.94M 332,029.90M 315,868.42M 302,918.72M 362,127.04M
Operating income 112,570.43M 136,146.87M 114,896.88M 110,827.44M 148,959.49M
Income before tax 172,055.87M 154,019.72M 144,243.89M 137,646.78M 175,167.02M
Net income 138,734.40M 129,065.10M 115,308.73M 101,794.80M 139,320.33M
EBITDA 173,002.89M 195,334.67M 181,905.74M 175,941.18M 224,440.65M
Diluted EPS 9.88 9.19 8.23 7.27 9.91
Dividends Per Share 2.50 4 4.20 4 5.20
Total Assets 3,407.21B 3,381.35B 3,320.94B 3,674.27B 3,908.87B
Total liabilities 2,232.87B 2,045.58B 1,918.27B 2,195.53B 2,330.88B
Total equity 1,083.12B 1,211.87B 1,239.98B 1,297.27B 1,380.45B
Operating cash flow -18,834.07M -25,748.60M 265,267.52M 384,203.05M -67,612.73M
 Dec 2017Dec 2018Dec 2019Dec 2020Dec 2021
Revenue 154,711.26M 175,556.20M 172,835.41M 181,970.13M 214,599.81M
Gross Profit 9,959.89M 11,010.97M 10,218.07M 10,287.77M 12,964.65M
Operating income 3,700.21M 4,514.98M 3,716.81M 3,763.94M 5,332.95M
Income before tax 5,655.50M 5,107.69M 4,666.16M 4,674.78M 6,271.22M
Net income 4,560.22M 4,280.13M 3,730.14M 3,457.17M 4,987.86M
EBITDA 5,686.63M 6,477.80M 5,884.49M 5,975.34M 8,035.28M
Diluted EPS 0.32 0.30 0.26 0.24 0.35
Dividends Per Share 0.08 0.13 0.13 0.13 0.18
Total Assets 114,495.58M 110,009.29M 110,782.99M 130,766.44M 141,283.06M
Total liabilities 75,033.31M 66,551.38M 63,991.58M 78,138.32M 84,247.68M
Total equity 36,397.05M 39,427.35M 41,364.52M 46,169.73M 49,895.44M
Operating cash flow -619.07M -853.89M 8,581.18M 13,048.37M -2,420.63M

Valuation Measures

Dec 2021
PER10.34
ROA3.67%
ROE10.40%
Operating margin2.48%
Profit margin2.32%

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. (2.7%)
  • BlackRock Fund Advisors (2.1%)
  • GIC Pte Ltd. (Investment Management) (1.9%)
  • Hon Hai Precision Industry Co., Ltd. (1.3%)
  • Fidelity Management & Research Co. LLC (1.2%)
  • Labor Pension New Fund (1.1%)
  • Norges Bank Investment Management (1.1%)
  • Fubon Life Insurance Co., Ltd. (0.9%)
  • 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

  • Lotes Co., Ltd
  • Sanmina Corporation
  • 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
  • UDE Corp.
  • Borqs Technologies, Inc.
  • Wistron Corporation
  • Super Micro Computer, Inc.
  • NETGEAR, Inc.
  • Hotron Precision Electronic Industrial Co. Ltd.
  • Applied Optoelectronics, Inc.
  • Boxlight Corporation Class A
  • Ledtech Electronics Corp.
  • G-SHANK Enterprise Co., Ltd.
  • Arlo Technologies, Inc.
  • Kortek Corporation
  • Minim, Inc.
Last Updated on 25 May, 2022

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