Taiwanese company Hon Hai Precision Industry Co., Ltd., also known as Foxconn (SS:601138), a Fortune 500 firm recognized for manufacturing Apple (NASDAQ:AAPL) iPhones, has recently been inspected by Chinese tax authorities, according to the Global Times newspaper. The company underwent tax searches at its offices in Guangdong and Jiangsu provinces. Its major factories in Henan and Hubei provinces were also inspected by the Ministry of Natural Resources.
These factories employ a large workforce and contribute billions in trade and investment. The specifics surrounding these inspections remain undisclosed. Amidst this, an expert emphasized that Taiwan-funded companies like Foxconn, which profit from development dividends, should assume social responsibilities and aid peaceful cross-strait relations.
According to InvestingPro, Foxconn is a prominent player in the Electronic Equipment, Instruments and components industry, boasting a market cap of 643.4M USD. It's worth noting that the company holds more cash than debt on its balance sheet, a strong indicator of financial health. Also, the company has maintained dividend payments for 24 consecutive years, offering a dividend yield of 3.56%, as per InvestingPro data. This consistent return to shareholders underscores the company's stability and commitment to its investors.
The Chinese Communist Party's obligation to unite with Taiwan since the civil war split has escalated tensions, leading to economic repercussions including the banning of Taiwanese imports like pineapples and grouper fish. Despite this, sanctions on Taiwanese companies operating in mainland China have been minimal.
Foxconn, which conducts most of its manufacturing in China, pledged cooperation with relevant authorities. Terry Gou, Foxconn's founder who recently resigned from the board to run in Taiwan’s upcoming presidential elections, is perceived as China-friendly with political alignment with the opposition party, Kuomingtang.
InvestingPro data also reveals that Foxconn has a P/E ratio of 13.3 and an adjusted P/E ratio of 13.88, which coupled with its low price volatility, makes it an interesting consideration for investors seeking a stable investment. For more insights like these, consider exploring the InvestingPro product which includes additional tips and real-time metrics.
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