Hon Hai Precision Industries (HNHPF)

QUOTE AND NEWS
The Hindu Business Line  Jun 8  Comment 
Taiwanese panel display maker Innolux Corp is looking to invest in India to expand into the subcontinent, with its biggest shareholder and key supply chain client Hon Hai Precision Industry Co Ltd...
Forbes  May 18  Comment 
Shares in Taiwan electronics contract manufacturing giant Hon Hai Precision, better known by its trade name “Foxconn,” rose by 3% this morning after the company said Friday net profit soared 55% in the first three months of 2015 amid...
Wall Street Journal  May 15  Comment 
Contract manufacturer Hon Hai, which derives almost half of its revenue from Apple, posted a 56% rise in first-quarter earnings.
Benzinga  May 15  Comment 
Hon Hai Precision Industry Co., Ltd.-ADR (OTC: HNHPF) reported a 56 percent gain in its net profit for the first quarter. Hon Hai's quarterly net profit surged to 30.39 billion new Taiwan dollars ($998 million), versus a year-ago profit of...
Wall Street Journal  Mar 30  Comment 
Hon Hai, the major iPhone assembler also known as Foxconn, reported its highest earnings growth in five years.
Japan Today  Mar 23  Comment 
Taiwan's Hon Hai Precision Industry Co is considering joining efforts to help rescue Japanese electronics maker Sharp Corp, the company said in a statement. Hon Hai's willingness to "participate" in Sharp has never been limited to investing,...
MarketWatch  Mar 22  Comment 
Japanese stocks came bopping higher in early Monday moves, with the Nikkei Stock Average rising 0.9% to its latest 15-year-high, as a positive lead from the U.S. and some premarket foreign buying helped the market advance despite a stronger yen....
Reuters  Mar 20  Comment 
Taiwan's Hon Hai Precision Industry Co is considering joining efforts to help rescue Japanese electronics maker Sharp Corp, the company said in a statement late on...
Wall Street Journal  Jan 29  Comment 
Hon Hai’s effort to expand beyond contract manufacturing has hit a hurdle after Taiwan regulators asked that a merger proposal for its two telecom units be resubmitted.




 

Hon Hai Precision Precision Industry TPE:2354 also known as Foxconn Technology is the world's biggest contract assembler and manufacturer of electronic components.[1] As a third party supplier it produces such things as optics, power supply modules, fiber optics, enclosures and a variety of connectors for large telecommunications companies including original equipment manufacturers among them Apple, Dell, Hewlett-Packard, Cisco, Sony, Nokia, Microsoft and Ericsson. It also engages in the processing, design and sale of motherboards, cameras and cell phones. The iPhone4s, which Hon Hai manufactures along with the iPad will push revenue higher in 2012, the year of its launch in China. The iPad had over 90% of the tablet market in 2010 but that could decrease to 60% in 2011 due to competition from Android based devices like Amazon's kindle fire. The tablet market is expected to be 42% bigger in 2012 with units sold up to 40 million from 29 million in 2011.[2]

In 2009 subsidiary Foxconn International Holdings partnered with Hewlett Packard to build a US$3 billion laptop production facility in Chongqing capable of making 20 million a year.[3] Such an investment is wise considering the electronics and information industry is on track to become the largest in the city by 2012 and Chongquing has the 23rd largest economy in Mainland China and the 20th largest population in China among administrative regions.

In 2010 the company made a big move into the television equpment market with the purchase of Sony's LCD TV production business in Mexico and Slovakia.[1]

Because of the variety of products it has exposure to a lot of markets and industry sectors. The company was founded in 1974 and maintains corporate offices in Taiwan and the Cayman Islands where limited liability subsidiary Foxconn International Holdings is based (est February 8, 2000).

Company Overview

With nearly 611,000 employees with plans to increase that to 1.3 million (2010) the company is one of the world's leading employers (half of them are work and live at its first and currently largest facility located in Shenzhen, China. The plant is comprised of 15 factories; by having large city like facilities with dormatories and hospitals Hon Hai is able to reduce expenses while improving integration, though cramped conditions negatively affect worker satisfaction and may result in lower worker productivity). By comparison Australia and Brazil's global 2000 companies have less than 1 million employees.[4] Unlike many of its competitors it has an interest in expanding into many new sometimes unrelated industries (does not consider it as risky as other companies do, the risk assessment tends to keep others more focused on a group of closely related products). In November 2010 it agreed to an alliance with three silicon valley companies centered around access to Asian markets, capital support, prototypes (the silicon valley companies are growing in the US market but have limited exposure elsewhere).[5]

  • Consumer Electronics - cameras, cell phones,
  • Electronic Equipment - coolers, motherboards, lenses, docking connectors
  • Technology - graphic cards, memory cards
  • Services - logistics and marketing

Hon Hai also provides after sales services (after market parts).

Business and Financials revenue, profits, assets

bil USD[6]'[7] revenue profit assets shareholders
equity
200861.8601.748nana
200959.32362.291731.985813.767
2010
(Jan-Nov)
65.3817
NT2.07T
2.432.0
2011
(Jan-Dec)
92.0

2011 fiscal year' revenue grew 19.89% to $92.0 billion (up 37.5% in the last quarter to $30.5b) higher than the planned 15% growth rate.[8] Fiscal 2010 revenue was $61.24b exceeded by only 106 other publicly traded companies.[9]
  • Subsidiaries

Foxconn International Holdings: As of December 31, 2010 it had a cash balance of US$1,356 million and total assets of $6.017 billion.[10] Total assets were up every year with the exception of 2008 when they were down 17.6% on the calendar year (the decrease showed up at the end of the company's 2009 fiscal year which ends in June, assets were down 28.7% from $6.7b to $5.2b.

fx rate used for first 11 months of 2010 is 31.660209, calculated using data found at xrates.com.[11]

Competition

  • Quanta Computer Inc. is Taiwan's second leading contract manufacturer. It reported a 1% fall in revenue in 2011 to $60b (December results were even worse, down 5.6% to $3b).[8]
  • Compal Electronics (TPE:2324) sold $23b worth of parts in 2011 (down 21%) and $1.7b in December (down 11.6%)
  • Acer (2353-TW) reported revenues of $12.4b in 2011 (down 23.52%) and $1.1b in December (down 7.6%).

References

  1. 1.0 1.1 EU OKs Foxconn bid for Sony's TV production in Slovakia, Mexico (2010-06-28).
  2. Is Research In Motion's Valuation Fair Or Just Bad Public Relations? (December 27, 2011).
  3. HP, Foxconn to set up laptop unit (2009-08-06).
  4. The World's Biggest Companies By Country (2009-04-08).
  5. Hon Hai cements Silicon Valley alliance (2010-11-18).
  6. Hon Hai Precision Industry (2010-07-26).
  7. Sales at Hon Hai Precfision fell 4.58% last month - Taipei Times (2010-12-12).
  8. Forbes: Hon Hai
  9. Hon Hai Dec 2010
  10. Monthly Exchange Rate Average (Taiwan Dollar to USD)
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