Hon Hai Precision Industry (2317) Earnings: Foxconn Industrial FY Net Income Falls Short of Estimates

Hon Hai Precision Industry on Smartkarma

Hon Hai Precision Industry, a key Apple partner, has recently received coverage on Smartkarma, an independent investment research network. The analysis from top independent analysts on the platform suggests that the company’s revenue for December 2023 was the lowest in recent history. However, there are positive developments in Hon Hai’s electric vehicle (EV) business, which is showcased at CES 2024 in Las Vegas this week. The company’s stock is currently trading at less than 5 times its projected 2025 earnings, making it a potential buying opportunity.

In another report by the same analyst, it is suggested that Hon Hai’s margin expansion story is finally starting to be realized. The company’s gross margin for the last quarter has exceeded expectations and is the highest it has been since 2018. This, along with the upcoming listing of its Foxtron EV joint venture in Taiwan, is expected to lead to significant margin improvement in 2024. Despite concerns over a Chinese government investigation and political risk due to Mr. Gou running for president, Hon Hai remains a Structural Long.

Another analyst on Smartkarma, Patrick Liao, predicts that Hon Hai’s fourth quarter results for 2023 will be higher than the previous quarter, but lower than the same period in 2022. However, if the market remains stable, there is potential for a slight upside in 2024. The company’s target of a 10% gross margin by 2025 remains unchanged.

In the latest Hon Hai Tech Day, Nvidia announced a partnership with the company to develop AI factories, which will produce new software. This will give Hon Hai a competitive advantage in the EV market, with its new Model N EV and Model C SUV set to be released in 2024. This development is expected to significantly increase the company’s value proposition to automakers, with potential for nearly 50% upside in its stock price.

A look at Hon Hai Precision Industry Smart Scores

Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma

Hon Hai Precision Industry has a bright long-term outlook, according to the Smartkarma Smart Scores. With a score of 5 for both Value and Dividend, the company is considered to have a strong financial standing and is expected to provide good returns to its shareholders. Additionally, with a score of 4 for both Growth and Resilience, Hon Hai Precision Industry is predicted to continue growing and adapting well to market changes. While it may not have the highest score for Momentum at 3, the company’s diverse range of electronic manufacturing services, including desktop and notebook PC assembly, connector production, and handset manufacturing, positions it well for future success.

Based on the description of Hon Hai Precision Industry, it is clear that the company plays a significant role in the electronic manufacturing industry. Its services cover a wide range of products, including computers, communications, and consumer electronic devices. This diversification, coupled with its strong financial standing and growth potential, makes Hon Hai Precision Industry a promising long-term investment. With high scores across the board on the Smartkarma Smart Scores, this company is one to watch for those interested in the electronic manufacturing sector.

Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
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