Hon Hai Precision Industries (HNHPF)

QUOTE AND NEWS
Wall Street Journal  Jul 11  Comment 
Hon Hai Precision Industry Co. plans to make its own industrial robots that it hopes will have the intelligence to handle assembly work like its skilled work force, its chairman said.
Wall Street Journal  Jul 3  Comment 
The Taiwan company said it had abandoned the idea of using the Shenzhen-based supplier's equipment in a mobile network it is building after Taiwanese regulators raised security concerns about equipment from mainland China.
Wall Street Journal  Jun 30  Comment 
Hon Hai Precision Industry, known as Foxconn, said it has bought a minority stake in a South Korean information-technology services provider as a "long-term investment."
TheStreet.com  Jun 25  Comment 
NEW YORK (TheStreet) -- Hon Hai Precision Industry Co., Ltd.  is reportedly in talks to make smartphones for a Chinese photo-editing application developer, as the assembler of Apple  products looks to expand its customer base, according to the...
Wall Street Journal  Jun 25  Comment 
Hon Hai Precision Industry Co. is in talks to make smartphones for a Chinese photo-editing application developer, as the key assembler of Apple Inc. products seeks to broaden its customer base.
Wall Street Journal  Jun 18  Comment 
Taiwanese mobile carrier Asia Pacific Telecom plans to absorb Amit Microsystems, wholly owned by Hon Hai Precision, in a share-swap deal, the companies said Wednesday.
Reuters  Jun 18  Comment 
Hon Hai Precision Industry Co is still interested in investing in Japan's Sharp Corp despite the collapse of an equity deal two years ago and would take a stake "tomorrow" at...
Wall Street Journal  May 21  Comment 
Taiwan prosecutors indicted five former Foxconn Technology Group employees for allegedly accepting bribes of over $5 million from component suppliers.
The Hindu Business Line  May 16  Comment 
Taiwanese firm Foxconn Technology Group, the world’s largest contract electronics manufacturer, said Friday that its production facility in Vietnam would close for three days to ensure the safety...




 

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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