Hon Hai (2317)

Equity Research 6 August 2026 | 7:22AM HKT

Hon Hai (2317.TW): Jul rev in line at +54% YoY; AI server and smartphones to support 3Q growth; Buy (on CL)

Hon Hai’s Jul revenues were +54% YoY/ +15% MoM to NT$947m, or 2% higher than Allen Chang | our estimates, overall in line. From a MoM perspective, Consumer Electronics & Goldman Sachs (Asia) L.L.C. Components delivered significant growth MoM, benefitting from the pull-in Verena Jeng momentum, followed by Cloud and Networking & Computing which achieved | Goldman Sachs (Asia) L.L.C. strong growth MoM. From a YoY perspective, all segments across Consumer Electronics, Components, Cloud and Networking & Computing delivered strong Ting Song | Goldman Sachs (Asia) L.L.C. growth YoY, and management attributed this to the strong pull-in momentum and higher selling prices of Consumer Electronics and Computing products. Management guided 3Q to see both QoQ and YoY growth, given their expectation for AI server racks to maintain growth, and as Consumer electronics enters the peak season.

We expect continued growth of the AI server business with market share gain opportunities, along with the upcoming smartphone form factor changes in 2026E to drive Hon Hai’s growth ahead. Maintain Buy (on CL).

Exhibit 1: Hon Hai’s Jul revenues +54% YoY, or +15% MoM

Jan-11 Sep-11 May-12 Jan-13 Sep-13 May-14 Jan-15 Sep-15 May-16 Jan-17 Sep-17 May-18 Jan-19 Sep-19 May-20 Jan-21 Sep-21 May-22 Jan-23 Sep-23 May-24 Jan-25 Sep-25 May-26

3-month revenues preview: We expect 3Q26E revenues to be +48% YoY / +22% QoQ to NT$3.1 trillion. June/ July delivered strong YoY (+52%/ 54% YoY), and we expect Aug revenues to remain strong at 73% YoY / 11% MoM to NT$1,051bn, supported by AI rack server ramp-up, and strong seasonality of the consumer electronics business.

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Goldman Sachs Hon Hai (2317.TW)

Exhibit 2: We model Hon Hai’s Aug 2026 revenue to be +73% YoY or +11% MoM Hon Hai’s monthly/quarterly revenue May 2026 June 2026 July 2026 Aug 2026E Sep 2026E Oct 2026E 2Q26 3Q26E Revenues (NT$m) 859,409 821,763 946,513 1,050,629 1,057,702 1,110,587 2,513,270 3,054,844 YoY 40% 52% 54% 73% 26% 24% 40% 48% MoM/QoQ 3% -4% 15% 11% 1% 5% 19% 22% GS estimates (NT$m) 815,456 695,162 928,592 2,386,670 Actual vs. GS 5% 18% 2% 5%

Source: Company data, Goldman Sachs Global Investment Research

EV business in July 2026: Hon Hai’s EV subsidiary Foxtron (2258.TW, Not Covered) reported July revenues of NT$598mn (vs. Jun-26 / Jul-25 revenues at NT$455mn / NT$280mn). Post the announcement of its proposal to acquire Luxgen in December (report), Foxtron has announced its first self-branded vehicle “Foxtron Bria”. Also, the partnership with Mitsubishi Motors (7211.T, covered by Kota Yuzawa) on passenger cars (read more in our report) and zero emission buses (read more on the company’s announcement) suggests incremental growth opportunities for Foxtron which could be positive for Hon Hai.

Exhibit 3: Foxtron’s (Hon Hai’s EV subsidiary) monthly revenues

Valuation: Our 12m TP for Hon Hai is unchanged at NT$400 and remains based on a P/E. Our target 2027E P/E multiple of 18.9x is derived from a peers’ average ratio of trading P/E to forward year NI YoY growth and OPM (P/E divided by the sum of NI YoY and OPM). Our target P/E of 18.9x is in the range of company’s historical forward P/E since 2010, reflecting our positive view on Hon Hai’s business expansion from the competitive consumer electronics market to AI servers and EVs outsourcing, which should drive profit expansion with diversifying business opportunities for Hon Hai. Maintain Buy (on CL).