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Hon Hai Precision Industry (HNHPF)
OTHER OTC:HNHPF
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Hon Hai Precision Industry
(OTC:HNHPF)
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Rating:73Outperform
Price Target:
$15.50
▲(3.33% Upside)
Hon Hai Precision Industry's overall stock score reflects strong financial performance and promising growth prospects in AI and cloud sectors. However, cash flow challenges and overbought technical indicators present risks. The stock is fairly valued with a reasonable P/E ratio and dividend yield.
Hon Hai Precision Industry (HNHPF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$103.00B
Dividend Yield2.57%
Average Volume (3M)3.63K
Price to Earnings (P/E)18.3
Beta (1Y)0.74
Revenue Growth17.53%
EPS Growth17.80%
CountryUS
Employees826,608
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)0.21
Shares Outstanding6,945,870,600
10 Day Avg. Volume1,784
30 Day Avg. Volume3,634
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.74
Enterprise Value/Revenue0.01
Enterprise Value/Gross Profit0.17
Enterprise Value/Ebitda0.20
Forecast
1Y Price Target
$20.00Price Target Upside33.33% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Hon Hai Precision Industry Business Overview & Revenue Model
Company DescriptionHon Hai Precision Industry Co., Ltd., also known as Foxconn, is a leading multinational electronics manufacturer headquartered in Taiwan. The company operates primarily in the electronics sector, providing a wide range of services including design, manufacturing, and supply chain management. Foxconn is best known for assembling products for major technology companies, such as Apple, Sony, and Microsoft, producing devices like smartphones, tablets, and gaming consoles. In addition to consumer electronics, Foxconn has diversified into other sectors, including automation, artificial intelligence, and electric vehicles.
How the Company Makes MoneyFoxconn generates revenue primarily through contract manufacturing services, where it assembles electronic products for various global technology brands. The company's revenue model is largely based on serving as an original equipment manufacturer (OEM) and original design manufacturer (ODM), allowing it to capitalize on high-volume production contracts. Key revenue streams include the assembly of smartphones, laptops, and other consumer electronics, with significant contributions from long-term partnerships with major clients like Apple, which account for a substantial portion of its sales. Additionally, Foxconn has been expanding its services into new areas such as automation and electric vehicle components, which are poised to become important revenue sources in the future. The company's scale and expertise in supply chain management further enhance its competitive edge and profitability.
Hon Hai Precision Industry Earnings Call Summary
Earnings Call Date:Aug 14, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 12, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance in terms of revenue and growth, particularly in the AI server and cloud products segments. However, challenges such as decreased cash flow, increased debt ratio, and exchange rate fluctuations were noted. Despite some lowlights, the company's strategic growth in AI and cloud products suggests a positive outlook.Q2-2025 Updates
Positive Updates
Record-Breaking Q2 Revenue
Q2 revenues reached TWD1.79 trillion, representing a 16% increase YoY and a record high for the same period in previous years. In US dollars, this represents an approximately 18.6% YoY increase.
Improved Operating Profit Margin
Operating profit margin increased by 0.28 percentage points YoY to 3.16%, primarily due to a lower expense ratio with expenses increasing by only 4% compared to a 16% revenue growth.
AI Server Revenue Growth
AI server revenue is expected to increase by over 170% YoY in Q3, with server rack shipments expected to triple QoQ. Full-year AI server-related revenue is anticipated to exceed TWD1 trillion.
Strong Demand for AI and Cloud Products
Cloud and Networking Products reached 41% of the product mix, increasing significantly by 9 percentage points compared to the same period last year, driven by strong growth in AI servers.
Negative Updates
Decrease in Cash and Net Cash
Cash and net cash decreased by TWD164.9 billion from the end of June last year, primarily due to exchange rate fluctuations and increased working capital demands driven by revenue growth.
Decline in Cash Flow from Operating Activities
Cash flow from operating activities amounted to TWD21.9 billion, representing a decrease of TWD21.9 billion from the TWD43.8 billion inflow in the same period last year due to the continuous increase of new products being pulled in for matching with customer inventory preparation.
Increased Debt Ratio
The debt ratio increased by 4 percentage points from the same period last year to 61%, primarily due to an increase in accounts payable and borrowings caused by revenue growth.
Impact of Exchange Rate Fluctuations
Exchange rate fluctuations are expected to negatively impact revenue and operating profit margins. A 10% depreciation of the US dollar against the Taiwan dollar will impact gross and operating profit margins.
Company Guidance
In the recent call, Hon Hai Precision Industry provided comprehensive guidance on several key metrics and strategic initiatives. For Q2 of 2025, the company reported record revenues of TWD1.79 trillion, a 16% YoY increase, with gross profit margin slightly declining to 6.33% due to exchange rate fluctuations. Operating profit margin improved to 3.16%, driven by a lower expense ratio, while net profit margin rose to 2.47%, and EPS increased by TWD0.66 to TWD3.19. The cash conversion cycle extended to 48 days, and the debt ratio increased to 61%. The company emphasized its strong growth trajectory in AI servers, anticipating a 170% YoY revenue increase in Q3, and highlighted its strategic plans for expanding AI infrastructure and EV production. Despite challenges from tariffs and exchange rates, Hon Hai maintained its full-year operating profit margin target, driven by significant revenue growth and strategic investments in various sectors, including AI, EVs, and digital health.Hon Hai Precision Industry Financial Statement Overview
Summary
Hon Hai Precision Industry demonstrates strong revenue growth and profitability, with stable gross and net profit margins. The balance sheet is solid with a moderate debt-to-equity ratio. However, cash flow management is a concern, with significant declines in free cash flow and a low operating cash flow to net income ratio.Income Statement
Hon Hai Precision Industry shows strong revenue growth with a 3.38% increase in TTM, supported by consistent profitability margins. The gross profit margin remains stable at around 6.2%, while the net profit margin has improved to 2.41% in TTM. The EBIT and EBITDA margins are healthy, indicating efficient operational management. Overall, the company demonstrates robust revenue growth and profitability.85
Very Positive
Balance Sheet
The balance sheet reflects a moderate debt-to-equity ratio of 0.58, indicating a balanced approach to leveraging. Return on equity has improved to 11.05% in TTM, showcasing effective use of equity to generate profits. The equity ratio is stable, suggesting a solid financial foundation. However, the company should monitor its debt levels to maintain financial flexibility.78
Positive
Cash Flow
The cash flow statement reveals challenges in free cash flow, with a significant decline of 75.93% in TTM. The operating cash flow to net income ratio is relatively low at 0.076, indicating potential cash flow management issues. Despite these challenges, the company maintains a positive free cash flow to net income ratio, suggesting some resilience in cash generation.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.42T | 6.86T | 6.16T | 6.63T | 5.99T | 5.36T |
| Gross Profit | 459.85B | 428.95B | 387.95B | 400.09B | 362.13B | 302.92B |
| EBITDA | 373.14B | 336.55B | 342.17B | 292.08B | 291.01B | 250.90B |
| Net Income | 182.12B | 152.71B | 142.10B | 141.48B | 139.32B | 101.79B |
Balance Sheet | ||||||
| Total Assets | 4.14T | 4.39T | 3.94T | 4.13T | 3.91T | 3.67T |
| Cash, Cash Equivalents and Short-Term Investments | 1.20T | 1.32T | 1.35T | 1.08T | 1.11T | 1.28T |
| Total Debt | 989.63B | 961.56B | 943.07B | 974.01B | 871.55B | 748.26B |
| Total Liabilities | 2.51T | 2.54T | 2.25T | 2.48T | 2.34T | 2.20T |
| Stockholders Equity | 1.46T | 1.65T | 1.49T | 1.45T | 1.38T | 1.30T |
Cash Flow | ||||||
| Free Cash Flow | -11.66B | 21.99B | 326.60B | 8.05B | -192.71B | 310.09B |
| Operating Cash Flow | 144.12B | 166.03B | 445.55B | 109.71B | -98.21B | 377.62B |
| Investing Cash Flow | -255.22B | -300.05B | -137.87B | -45.44B | -92.08B | 34.59B |
| Financing Cash Flow | 11.96B | -164.07B | -160.64B | -87.87B | 24.28B | -25.12B |
Hon Hai Precision Industry Technical Analysis
Positive
15.00
Price Trends
13.63
Positive
12.12
Positive
10.99
Positive
Market Momentum
0.38
Negative
64.73
Neutral
83.35
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HNHPF, the sentiment is Positive. The current price of 15 is above the 20-day moving average (MA) of 14.47, above the 50-day MA of 13.63, and above the 200-day MA of 10.99, indicating a bullish trend. The MACD of 0.38 indicates Negative momentum. The RSI at 64.73 is Neutral, neither overbought nor oversold. The STOCH value of 83.35 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HNHPF.
Hon Hai Precision Industry Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $150.66B | 49.23 | 31.02% | 0.53% | 40.51% | 49.81% | |
74 Outperform | $21.50B | 25.14 | 17.67% | ― | -3.63% | 2.26% | |
73 Outperform | $103.00B | 18.27 | 11.70% | 2.57% | 17.53% | 17.80% | |
72 Outperform | $65.88B | 46.03 | 11.63% | 1.22% | 4.86% | -56.43% | |
71 Outperform | $73.10B | 90.35 | 7.55% | 1.32% | 14.63% | 86.61% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $21.70B | 34.14 | 40.43% | 0.16% | 3.18% | -46.01% |
* Technology Sector Average
HNHPF
Hon Hai Precision Industry
15.00
2.94
24.38%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.