Hon Hai Precision Industry (2317) Earnings Surpass Estimates: In-depth Analysis of 4Q and 2023 Year Results

Hon Hai Precision Industry on Smartkarma

Hon Hai Precision Industry, a major partner of Apple, has recently been in the news due to its weak December revenue figures. According to Vincent Fernando, CFA, the company’s December revenue was the lowest in recent history. However, the company’s EV business expansion is progressing, and it is currently trading at a low valuation. This has led to many analysts, including Vincent Fernando, to see this as a buying opportunity.

In another report by Vincent Fernando, CFA, it is suggested that Hon Hai’s margin expansion story is finally starting to be realized. The company’s recent results have shown higher than expected margins, with gross margin reaching its highest level since 2018. The company has also maintained its 2025 gross margin target of 10%. Despite concerns over a Chinese government investigation and political risk, the company remains a Structural Long.

According to analyst Patrick Liao, Hon Hai’s 4Q23F results are expected to be higher than 3Q23, but lower than 4Q22. However, if the market remains unchanged, there is potential for slight upside in the 2024 market. The company’s target of 10% gross margin in 2025F also remains unchanged.

At Hon Hai’s Tech Day, Nvidia announced a partnership with the company to develop AI factories for the production of new software. This partnership, along with Hon Hai’s unveiling of new EV models, has led to a competitive advantage for the company in the EV market. Analyst Vincent Fernando, CFA, expects nearly 50% upside for Hon Hai shares due to these developments.

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, one of the largest electronic manufacturing companies in the world, has a positive long-term outlook according to the Smartkarma Smart Scores. With a top score of 5 for both value and dividend, the company is expected to perform well financially and provide steady returns to its shareholders.

Additionally, Hon Hai Precision Industry scores a 4 for both growth and resilience, indicating its potential for future expansion and ability to withstand economic downturns. However, the company has a slightly lower score of 3 for momentum, suggesting that its stock price may not see significant short-term gains.

Overall, Hon Hai Precision Industry‘s strong performance in key areas such as value and dividend make it a promising investment for those looking for long-term stability and growth in the electronic manufacturing industry.

Based on its business operations, which include the production of computers, communications devices, and consumer electronics, Hon Hai Precision Industry is well-positioned to capitalize on the growing demand for these products in the global market.

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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