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Hon Hai Precision Industry

DB:HHP2
Snowflake Description

Adequate balance sheet average dividend payer.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
HHP2
DB
NT$1,232B
Market Cap
  1. Home
  2. DE
  3. Tech
Company description

Hon Hai Precision Industry Co., Ltd. provides integrated electronics manufacturing services in Ireland, the United States, China, Singapore, Japan, Taiwan, and internationally. The last earnings update was 19 days ago. More info.


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  • Hon Hai Precision Industry has significant price volatility in the past 3 months.
HHP2 Share Price and Events
7 Day Returns
8.1%
DB:HHP2
1.6%
DE Electronic
1.8%
DE Market
1 Year Returns
-8.6%
DB:HHP2
-0.1%
DE Electronic
-6%
DE Market
HHP2 Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Hon Hai Precision Industry (HHP2) 8.1% 27.4% 29.3% -8.6% 4.4% 15.2%
DE Electronic 1.6% 5.3% 20.4% -0.1% 98.5% 105%
DE Market 1.8% 4.2% 7.4% -6% 10.1% 15.4%
1 Year Return vs Industry and Market
  • HHP2 underperformed the Electronic industry which returned -0.1% over the past year.
  • HHP2 underperformed the Market in Germany which returned -6% over the past year.
Price Volatility
HHP2
Industry
5yr Volatility vs Market
Related Companies

HHP2 Value

 Is Hon Hai Precision Industry undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Hon Hai Precision Industry to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Hon Hai Precision Industry.

DB:HHP2 Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 14 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 8.6%
Perpetual Growth Rate 10-Year DE Government Bond Rate 0.2%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for DB:HHP2
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year DE Govt Bond Rate 0.2%
Equity Risk Premium S&P Global 6%
Electronic Unlevered Beta Simply Wall St/ S&P Global 1.07
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 1.067 (1 + (1- 20%) (63.3%))
1.407
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.41
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 0.23% + (1.407 * 5.96%)
8.62%

Discounted Cash Flow Calculation for DB:HHP2 using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Hon Hai Precision Industry is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

DB:HHP2 DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (TWD, Millions) Source Present Value
Discounted (@ 8.62%)
2019 148,204.09 Analyst x6 136,448.16
2020 144,239.48 Analyst x5 122,264.15
2021 131,471.82 Analyst x2 102,601.84
2022 123,032.59 Est @ -6.42% 88,399.57
2023 117,588.49 Est @ -4.42% 77,786.15
2024 114,026.68 Est @ -3.03% 69,446.67
2025 111,686.93 Est @ -2.05% 62,626.02
2026 110,159.11 Est @ -1.37% 56,869.62
2027 109,179.61 Est @ -0.89% 51,893.02
2028 108,574.73 Est @ -0.55% 47,512.04
Present value of next 10 years cash flows NT$815,847.25
DB:HHP2 DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2028 × (1 + g) ÷ (Discount Rate – g)
= NT$108,574.73 × (1 + 0.23%) ÷ (8.62% – 0.23%)
NT$1,297,406.90
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= NT$1,297,406.90 ÷ (1 + 8.62%)10
NT$567,742.12
DB:HHP2 Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= NT$815,847.25 + NT$567,742.12
NT$1,383,589.37
Equity Value per Share
(TWD)
= Total value / Shares Outstanding
= NT$1,383,589.37 / 13,861.51
NT$99.82
DB:HHP2 Discount to Share Price
Calculation Result
Non-primary Listing Adjustment Factor 1 share in DB:HHP2 represents 0.05962x of TSEC:2317
(This could be a different class, a depositary receipt, a different currency, or all of these things.)
0.05962x
Value per Share
(Listing Adjusted, EUR)
= Value per Share (TWD) x Listing Adjustment Factor
= NT$ 99.82 x 0.05962
€5.95
Value per share (EUR) From above. €5.95
Current discount Discount to share price of €5.30
= -1 x (€5.30 - €5.95) / €5.95
10.9%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

Current Discount
Amount off the current price Hon Hai Precision Industry is available for.
Intrinsic value
11%
Share price is €5.3 vs Future cash flow value of €5.95
Current Discount Checks
For Hon Hai Precision Industry to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • Hon Hai Precision Industry's share price is below the future cash flow value, but not at a moderate discount (< 20%).
  • Hon Hai Precision Industry's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Hon Hai Precision Industry's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Hon Hai Precision Industry's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
DB:HHP2 PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2018-12-31) in TWD NT$8.03
TSEC:2317 Share Price ** TSEC (2019-04-18) in TWD NT$88.9
Germany Electronic Industry PE Ratio Median Figure of 13 Publicly-Listed Electronic Companies 23.37x
Germany Market PE Ratio Median Figure of 422 Publicly-Listed Companies 19.59x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Hon Hai Precision Industry.

DB:HHP2 PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= TSEC:2317 Share Price ÷ EPS (both in TWD)

= 88.9 ÷ 8.03

11.07x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Hon Hai Precision Industry is good value based on earnings compared to the DE Electronic industry average.
  • Hon Hai Precision Industry is good value based on earnings compared to the Germany market.
Price based on expected Growth
Does Hon Hai Precision Industry's expected growth come at a high price?
Raw Data
DB:HHP2 PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 11.07x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 14 Analysts
-2.2%per year
Germany Electronic Industry PEG Ratio Median Figure of 12 Publicly-Listed Electronic Companies 2.1x
Germany Market PEG Ratio Median Figure of 270 Publicly-Listed Companies 1.57x

*Line of best fit is calculated by linear regression .

DB:HHP2 PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 11.07x ÷ -2.2%

-4.94x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Hon Hai Precision Industry earnings are not expected to grow next year, we can't assess if its growth is good value.
Price based on value of assets
What value do investors place on Hon Hai Precision Industry's assets?
Raw Data
DB:HHP2 PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2018-12-31) in TWD NT$87.43
TSEC:2317 Share Price * TSEC (2019-04-18) in TWD NT$88.9
Germany Electronic Industry PB Ratio Median Figure of 19 Publicly-Listed Electronic Companies 2.57x
Germany Market PB Ratio Median Figure of 570 Publicly-Listed Companies 1.84x
DB:HHP2 PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= TSEC:2317 Share Price ÷ Book Value per Share (both in TWD)

= 88.9 ÷ 87.43

1.02x

* Primary Listing of Hon Hai Precision Industry.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Hon Hai Precision Industry is good value based on assets compared to the DE Electronic industry average.
X
Value checks
We assess Hon Hai Precision Industry's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Electronic industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Electronic industry average (and greater than 0)? (1 check)
  5. Hon Hai Precision Industry has a total score of 3/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

HHP2 Future Performance

 How is Hon Hai Precision Industry expected to perform in the next 1 to 3 years based on estimates from 14 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
-2.2%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Hon Hai Precision Industry expected to grow at an attractive rate?
  • Hon Hai Precision Industry's earnings are expected to decrease over the next 1-3 years, this is below the low risk savings rate of 0.2%.
Growth vs Market Checks
  • Hon Hai Precision Industry's earnings are expected to decrease over the next 1-3 years, this is below the Germany market average.
  • Hon Hai Precision Industry's revenue growth is positive but not above the Germany market average.
Annual Growth Rates Comparison
Raw Data
DB:HHP2 Future Growth Rates Data Sources
Data Point Source Value (per year)
DB:HHP2 Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 14 Analysts -2.2%
DB:HHP2 Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 14 Analysts 1.2%
Germany Electronic Industry Earnings Growth Rate Market Cap Weighted Average 12.5%
Germany Electronic Industry Revenue Growth Rate Market Cap Weighted Average 7.8%
Germany Market Earnings Growth Rate Market Cap Weighted Average 11.5%
Germany Market Revenue Growth Rate Market Cap Weighted Average 4.8%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
DB:HHP2 Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 14 Analyst Estimates (S&P Global) See Below
All numbers in TWD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
DB:HHP2 Future Estimates Data
Date (Data in TWD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2021-12-31 5,527,274 224,254 123,027 4
2020-12-31 5,358,329 187,189 120,800 13
2019-12-31 5,216,268 188,738 116,242 14
DB:HHP2 Past Financials Data
Date (Data in TWD Millions) Revenue Cash Flow Net Income *
2018-12-31 5,293,803 -40,156 129,065
2018-09-30 5,214,293 -170,047 138,105
2018-06-30 4,917,345 -205,653 134,258
2018-03-31 4,760,287 -109,829 134,648
2017-12-31 4,706,736 -39,341 138,734
2017-09-30 4,379,587 19,528 135,842
2017-06-30 4,376,044 158,941 149,448
2017-03-31 4,375,768 202,373 149,254
2016-12-31 4,358,733 174,021 148,663
2016-09-30 4,385,208 257,576 132,831
2016-06-30 4,375,461 185,514 136,054
2016-03-31 4,426,033 181,681 144,058

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Hon Hai Precision Industry's earnings are expected to decrease over the next 1-3 years, this is not considered high growth.
  • Hon Hai Precision Industry's revenue is expected to grow by 1.2% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
DB:HHP2 Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 14 Analyst Estimates (S&P Global) See Below

All data from Hon Hai Precision Industry Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

DB:HHP2 Future Estimates Data
Date (Data in TWD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2021-12-31 8.98 10.55 7.20 4.00
2020-12-31 8.74 9.78 7.60 12.00
2019-12-31 8.38 9.20 7.91 13.00
DB:HHP2 Past Financials Data
Date (Data in TWD Millions) EPS *
2018-12-31 8.03
2018-09-30 8.59
2018-06-30 9.69
2018-03-31 9.71
2017-12-31 10.01
2017-09-30 9.80
2017-06-30 10.78
2017-03-31 10.77
2016-12-31 10.74
2016-09-30 9.62
2016-06-30 9.87
2016-03-31 10.45

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Hon Hai Precision Industry is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
X
Future performance checks
We assess Hon Hai Precision Industry's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the Germany market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the Germany market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Hon Hai Precision Industry has a total score of 0/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

HHP2 Past Performance

  How has Hon Hai Precision Industry performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Hon Hai Precision Industry's growth in the last year to its industry (Electronic).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Hon Hai Precision Industry's year on year earnings growth rate has been positive over the past 5 years.
  • Hon Hai Precision Industry's 1-year earnings growth is negative, it can't be compared to the 5-year average.
  • Hon Hai Precision Industry's 1-year earnings growth is negative, it can't be compared to the DE Electronic industry average.
Earnings and Revenue History
Hon Hai Precision Industry's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Hon Hai Precision Industry Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

DB:HHP2 Past Revenue, Cash Flow and Net Income Data
Date (Data in TWD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2018-12-31 5,293,803.02 129,065.11 111,452.95 84,430.08
2018-09-30 5,214,292.97 138,105.03 117,048.42 89,508.42
2018-06-30 4,917,344.80 134,258.02 113,923.09 87,422.87
2018-03-31 4,760,286.82 134,647.53 109,518.38 84,700.12
2017-12-31 4,706,736.10 138,734.40 108,655.36 81,781.15
2017-09-30 4,379,586.96 135,841.90 97,131.87 61,962.50
2017-06-30 4,376,043.54 149,448.45 95,881.26 56,902.28
2017-03-31 4,375,768.00 149,253.76 95,506.78 54,121.78
2016-12-31 4,358,733.36 148,662.98 95,505.22 51,140.26
2016-09-30 4,385,207.80 132,830.59 100,327.63 51,722.96
2016-06-30 4,375,461.46 136,053.66 100,657.59 51,833.94
2016-03-31 4,426,032.76 144,058.47 102,522.47 52,231.98
2015-12-31 4,482,145.97 146,866.98 103,831.71 52,491.69
2015-09-30 4,552,537.18 150,649.99 103,409.37 51,798.09
2015-06-30 4,437,429.33 146,880.66 102,599.41 50,376.31
2015-03-31 4,343,815.42 141,377.23 100,656.20 49,446.81
2014-12-31 4,213,172.32 130,534.73 99,898.69 48,853.76
2014-09-30 4,041,454.53 116,431.59 101,367.08 48,176.72
2014-06-30 4,010,261.73 113,095.89 99,133.29 47,439.08
2014-03-31 4,026,784.91 109,887.41 99,036.82 46,807.38
2013-12-31 3,952,317.54 106,697.16 98,800.07 46,580.03
2013-09-30 3,761,680.96 98,022.95 94,167.42 45,037.60
2013-06-30 3,716,821.96 100,021.48 96,204.76 45,998.10
2013-03-31 3,713,121.61 95,102.99 95,365.35 46,047.04
2012-12-31 3,905,395.32 94,641.97 96,685.25 45,665.75
2012-09-30 3,841,836.68 95,732.44 117,930.72 43,807.10
2012-06-30 3,830,687.43 82,157.46 124,935.30 42,516.38

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Hon Hai Precision Industry has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Hon Hai Precision Industry used its assets less efficiently than the DE Electronic industry average last year based on Return on Assets.
  • Hon Hai Precision Industry's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Hon Hai Precision Industry's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Electronic industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Hon Hai Precision Industry has a total score of 1/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

HHP2 Health

 How is Hon Hai Precision Industry's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Hon Hai Precision Industry's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Hon Hai Precision Industry is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Hon Hai Precision Industry's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Hon Hai Precision Industry's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of physical assets or inventory.
  • Debt is covered by short term assets, assets are 3.5x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Hon Hai Precision Industry Company Filings, last reported 3 months ago.

DB:HHP2 Past Debt and Equity Data
Date (Data in TWD Millions) Total Equity Total Debt Cash & Short Term Investments
2018-12-31 1,332,433.89 780,049.66 857,575.01
2018-09-30 1,268,510.26 803,724.48 819,653.08
2018-06-30 1,309,971.70 709,275.84 808,617.32
2018-03-31 1,204,313.82 617,793.69 687,518.36
2017-12-31 1,171,792.46 667,982.77 782,960.27
2017-09-30 1,156,637.61 543,778.09 753,091.47
2017-06-30 1,132,859.85 387,619.35 740,582.54
2017-03-31 1,183,505.33 350,795.50 690,143.65
2016-12-31 1,133,788.60 429,096.36 745,416.76
2016-09-30 1,043,463.91 363,396.44 761,005.56
2016-06-30 1,025,067.73 329,209.48 762,965.72
2016-03-31 1,079,230.49 301,954.67 715,209.16
2015-12-31 1,060,391.08 297,969.48 708,183.49
2015-09-30 1,027,087.48 299,465.47 706,179.90
2015-06-30 970,615.21 420,221.61 833,488.29
2015-03-31 1,001,471.72 374,017.55 758,363.43
2014-12-31 984,676.80 417,375.75 720,563.75
2014-09-30 908,491.68 396,408.18 633,790.84
2014-06-30 835,710.35 383,632.12 632,791.65
2014-03-31 832,100.23 465,240.98 765,001.75
2013-12-31 805,924.60 535,644.97 700,560.50
2013-09-30 752,749.74 511,867.94 637,223.71
2013-06-30 729,059.71 532,328.12 604,617.71
2013-03-31 716,036.75 617,038.30 680,874.69
2012-12-31 680,913.75 411,252.18 506,444.59
2012-09-30 640,287.51 515,055.20 565,933.66
2012-06-30 620,466.97 612,912.02 638,150.82
  • Hon Hai Precision Industry's level of debt (58.5%) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has been reduced over the past 5 years (66.3% vs 58.5% today).
  • Operating cash flow is negative therefore debt is not well covered.
  • Hon Hai Precision Industry earns more interest than it pays, coverage of interest payments is not a concern.
X
Financial health checks
We assess Hon Hai Precision Industry's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Hon Hai Precision Industry has a total score of 4/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

HHP2 Dividends

 What is Hon Hai Precision Industry's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
2.81%
Current annual income from Hon Hai Precision Industry dividends. Estimated to be 4.14% next year.
If you bought €2,000 of Hon Hai Precision Industry shares you are expected to receive €56 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Hon Hai Precision Industry's pays a higher dividend yield than the bottom 25% of dividend payers in Germany (1.43%).
  • Hon Hai Precision Industry's dividend is below the markets top 25% of dividend payers in Germany (3.72%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
DB:HHP2 Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 14 Analyst Estimates (S&P Global) See Below
Germany Electronic Industry Average Dividend Yield Market Cap Weighted Average of 9 Stocks 1.1%
Germany Market Average Dividend Yield Market Cap Weighted Average of 326 Stocks 3%
Germany Minimum Threshold Dividend Yield 10th Percentile 0.8%
Germany Bottom 25% Dividend Yield 25th Percentile 1.4%
Germany Top 25% Dividend Yield 75th Percentile 3.7%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

DB:HHP2 Future Dividends Estimate Data
Date (Data in NT$) Dividend per Share (annual) Avg. No. Analysts
2021-12-31 3.17 5.00
2020-12-31 3.82 13.00
2019-12-31 3.74 13.00
DB:HHP2 Past Annualized Dividends Data
Date (Data in NT$) Dividend per share (annual) Avg. Yield (%)
2018-05-15 2.500 2.944
2017-06-23 5.625 4.490
2016-05-16 4.546 4.305
2015-05-15 4.113 4.324
2015-03-31 4.113 4.087
2014-05-15 1.739 1.761
2013-05-15 1.318 1.778
2013-05-14 1.318 1.906
2012-11-14 1.198 1.617
2012-05-15 1.198 1.635
2011-08-31 0.726 1.055
2011-05-13 0.726 1.097
2010-05-13 1.296 1.584
2010-04-28 1.296 1.382
2009-05-14 0.620 0.767
2009-04-21 1.470 2.612

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Dividends per share have been volatile in the past 10 years (annual drop of over 20%).
  • Dividends per share have increased over the past 10 years.
Current Payout to shareholders
What portion of Hon Hai Precision Industry's earnings are paid to the shareholders as a dividend.
  • Dividends paid are well covered by earnings (3.2x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be well covered by earnings (2.8x coverage).
X
Income/ dividend checks
We assess Hon Hai Precision Industry's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.8%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Hon Hai Precision Industry afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Hon Hai Precision Industry has a total score of 4/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

HHP2 Management

 What is the CEO of Hon Hai Precision Industry's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Terry Gou
AGE 67
CEO Bio

Mr. Tai-Ming Gou, also known as Terry, serves as the President and General Manager of Hon Hai Precision Industry Co., Ltd. Mr. Gou served as Chief Executive Officer of Hon Hai Precision Industry Co. Ltd., since January 1995. He co-founded Integrated Telecom Express Inc. He has been the Chairman of Hon Hai Precision Industry Co., Ltd. since 1974 and has been its Director since February 20, 1974 at Foxconn (Far East) Limited. He served as Chairman of Mold Industry Association. He has been a Director of Artest Corp. since March 1997. He served as a Director of GoPro, Inc. since December 2012. He served as a Director of Integrated Telecom Express Inc. since October 1995. He served as Director of Taiwan Electrical Equipment Association. Mr. Gou received a B.S. in Shipping Management from the China College of Marine Technology and Commerce.

CEO Compensation
  • Insufficient data for Terry to compare compensation growth.
  • Insufficient data for Terry to establish whether their remuneration is reasonable compared to companies of similar size in Germany.
Management Team

Terry Gou

TITLE
Chairman
AGE
67

De-Cai Huang

TITLE
Financial Director

Zong-Kai Chou

TITLE
Accounting Director

Yen Shyang Hwang

TITLE
Investor Relations Officer

Chin-Min Huang

TITLE
Deputy Director of Public Relations Office
TENURE
1.8 yrs

Fang-Ming Lu

TITLE
President of Business Group & Director
AGE
63
TENURE
1.5 yrs

Yi-Bin Chien

TITLE
Department General Manager
AGE
58

Jin-Ming Li

TITLE
Head Office General Manager
Board of Directors Tenure

Average tenure and age of the Hon Hai Precision Industry board of directors in years:

2.8
Average Tenure
66.5
Average Age
  • The average tenure for the Hon Hai Precision Industry board of directors is less than 3 years, this suggests a new board.
Board of Directors

Terry Gou

TITLE
Chairman
AGE
67
TENURE
45.3 yrs

Fang-Ming Lu

TITLE
President of Business Group & Director
AGE
63
TENURE
11.8 yrs

Kai-Fu Lee

TITLE
Independent Director
AGE
57
TENURE
2.8 yrs

Qing-Yuan Huang

TITLE
Director
AGE
69
TENURE
11.8 yrs

Chi-Shean Chan

TITLE
Independent Director
AGE
70
TENURE
2.8 yrs

Jen-Gwo Chen

TITLE
Director
AGE
63
TENURE
2.8 yrs

Hsueh-Jen Sung

TITLE
Director
AGE
66
TENURE
2.8 yrs

Robert Mao

TITLE
Director
AGE
74
TENURE
2 yrs

Kuo Wang

TITLE
Independent Director
TENURE
1.3 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price (€) Value (€)
X
Management checks
We assess Hon Hai Precision Industry's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Hon Hai Precision Industry has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

HHP2 News

Simply Wall St News

HHP2 Company Info

Description

Hon Hai Precision Industry Co., Ltd. provides integrated electronics manufacturing services in Ireland, the United States, China, Singapore, Japan, Taiwan, and internationally. The company primarily manufactures, sells, and services connectors, telecommunication and computer cases, thermal modules, wired/wireless communication products, optical products, power supply modules, and assemblies for use in the information technology, communications, automotive equipment, precision molding, automobile, and consumer electronics industries. It also provides planning, advisory, and business management services; and software and electronic information application, logistics, leasing, export processing, construction, and information/software services. In addition, it is involved in the manufactures automobile wires/electronic devices and electronic components, machinery and equipment, routers, application modules and network cables assemblies, portable cameras, and computers and data processing equipment; reinvestment in the businesses relating to robots, automatic equipment, parts, and accessories and corresponding services; the retail of office machinery and equipment, and electronic appliances; and the sale, software development, repair, rental, and after-sale services of robots. Hon Hai Precision Industry Co., Ltd. was founded in 1974 and is based in New Taipei City, Taiwan.

Details
Name: Hon Hai Precision Industry Co., Ltd.
HHP2
Exchange: DB
Founded: 1974
NT$35,540,544,836
13,861,507,922
Website: http://www.foxconn.com
Address: Hon Hai Precision Industry Co., Ltd.
No. 2, Zihyou Street,
Tucheng District,
New Taipei City,
236,
Taiwan
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
TSEC 2317 Common Stock Taiwan Stock Exchange TW TWD 02. Jan 1992
OTCPK HNHA.F Common Stock Pink Sheets LLC US USD 02. Jan 1992
LSE HHPD SP GDS REG S NEW London Stock Exchange GB USD 30. Sep 1999
BASE HHPD CEDEAR EACH REP 1 GDR REG'S Buenos Aires Stock Exchange AR ARS 20. Apr 2019
OTCPK HNHP.F SP GDS REG S NEW Pink Sheets LLC US USD 30. Sep 1999
DB HHP2 SP GDS REG S NEW Deutsche Boerse AG DE EUR 30. Sep 1999
BATS-CHIXE HHPDL SP GDS REG S NEW BATS 'Chi-X Europe' GB USD 30. Sep 1999
Number of employees
Current staff
Staff numbers
0
Hon Hai Precision Industry employees.
Industry
Electronic Manufacturing Services
Tech
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/04/20 20:49
End of day share price update: 2019/04/18 00:00
Last estimates confirmation: 2019/04/18
Last earnings filing: 2019/04/01
Last earnings reported: 2018/12/31
Last annual earnings reported: 2018/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.