Managing Director, Zero One, Zero One

Vincent Fernando, CFA

20 years of experience researching capital markets in Asia and the USA.

Managing Director, Zero One

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Equity Bottom-Up

Hon Hai Precision Industry / Equity Bottom-Up

<ul>
<li>Hon Hai results slightly beat on revenue and slightly missed on EPS, but overall the result was decent since China COVID margin impact was well managed.</li>
<li>The company has reiterated its 2025 target for gross margin to rise to 10% and over NT$1 trillion of revenue by 2025 from its new Electric Vehicle platform business. </li>
<li>While 2023E revenue was guided to be flat YoY, this was already roughly expected. We maintain our structural Long view on the shares.</li>
</ul>


Hon Hai results slightly beat on revenue and slightly missed on EPS, but overall the result was decent since China COVID margin impact was well managed.
The company has reiterated its 2025 target for gross margin to rise to 10% and over NT$1 trillion of revenue by 2025 from its new Electric Vehicle platform business. 
While 2023E revenue was guided to be flat YoY, this was already roughly expected. We maintain our structural Long view on the shares.


Hon Hai Results: Managed Q4 COVID Issues Well, Reiterates Margin Expansion & EV Targets; Stay Long