Hon Hai Precision records lucrative revenues

Hon Hai Precision Industry Co., Ltd. has again secured the title of Taiwan's biggest private manufacturer, with its 2005 revenue totaling NT$675.7 billion (US$21 billion at US$1:NT$32), and its revenue in December 2005 alone topping NT$83.8 billion (US$2.6 billion).

The December revenue represented a 75% increase from the same month of 2004, while the 2005 revenue posted a 63% gain from a year earlier. Hon Hai's executives mostly attributed the hefty December revenue increase to rapid growth of the company's personal computer and consumer electronics sales. Some foreign institutional investors ascribed the December growth mostly to increased contracts from Apple for iPod music players.

The December revenue also places Hon Hai ahead of its nearest rival, Flextronics of Singapore, making it the world's No. 1 supplier of built-to-order electronics products.

Hon Hai, in combination with its affiliates, is forecast to rake in revenue crossing NT$1 trillion (US$31 billion) throughout this year. The company has grown at a pace of more than 50% since 2000. Its earnings per share for this year are forecast at NT$12.97, fueling the speculation that its target stock price will likely be revised upward to NT$220 (US$6.8) over the next 12 months from the current NT$164 (US$5.1). The earnings figure is forecast at NT$15.52 per share for 2007.

Deustche Bank analyzed that Hon Hai's incomes for this year would mostly come from sales of personal computers, mobile phones, consumer electronics and networking products. Hon Hai has landed orders from Hewlett-Packard (HP), Dell, Apple, Acer, Sony, and Cisco Systems.

Compared with Hon Hai, the other four Taiwanese suppliers of contract-electronics products saw their December 2005 revenues decline from a month earlier.

The main reason for Asustek Computer's recession is the arrival of the traditional slack season for computer motherboards, the company's vital business line. Asustek had revenue of NT$350 billion (US$10.9 billion) throughout last year.

Quanta Computer and Compal Electronics blamed the recent value rise of New Taiwan dollar against U.S. dollar and lower gross margins for the recessions of their December revenues. Quanta had revenue of NT$400 billion (US$12.5 billion) by the end of 2005, while Compal had NT$220 billion (US$6.8 billion).

BenQ raked in NT$160 billion (US$5 billion) throughout 2005. The company attributed the reduction of its December 2005 revenue mostly to the unrealized returns from its acquisition of Siemens AG's handset unit.

source & copyright: CENS