Hon Hai (2317-TW) Chairman Liu Yangwei said that the Group’s ability to vertically integrate in the ICT industry is probably the first in the industry. Chinese competitors are currently catching up, but the possibility of replacing Hon Hai in 2-3 years is very low. .
Liu Yangwei pointed out in an interview with a financial program that Hon Hai used to talk less to the outside world, so the outside world did not know enough about Hon Hai. He always thought that Hon Hai seemed to be only doing assembly, but in fact it was not. Because if only doing assembly, the gross profit margin is probably only 2-3 %, but Hon Hai’s gross profit margin is 5-6% or even 7%.
Liu Yangwei further explained that Hon Hai’s vertical integration is very strong. Taking the mobile phone part as an example, about 60-70% of the parts group can be self-made, and the technology is also very diverse, especially the mechanism or surface treatment technology.
He emphasized that the Group’s vertical integration capabilities in ICT are probably the first in the industry, and competitors including China are all catching up. However, it is not easy to spread the vertical integration capabilities and it is definitely not a market. As mentioned above, Chinese competitors can replace Hon Hai in 2-3 years.
Finally, Liu Yangwei also advertised to Hon Hai investors that Hon Hai’s business operations are very, very stable, and the entire financial operation is also very conservative. Although this industry only allows 5-6% profits, it is a very stable business operation.
In addition, Liu Yangwei is more optimistic about the huge potential of the auto industry, coupled with the recent continuous progress in electric vehicles, the future production value will be greater and very promising, and he is confident of reaching the goal of 10% gross profit margin in 2025.
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