Research Update: Foxconn Industrial Internet Co. Ltd. Assigned 'A-' Rating With Stable Outlook; MTN Program Rated 'A-'

We view Foxconn Industrial Internet Co. Ltd. (Fii) as a core subsidiary of Hon Hai Precision Industry Co. Ltd. (Hon Hai Group; A-/Stable/--). The electronics manufacturing services (EMS) provider accounts for about half of the group's EBITDA. China-based Fii has strong manufacturing technology, efficient operations, and good customer relationships. This is partly tempered by customer concentration and significant exposure to the volatile smartphone end-market. We expect Fii to maintain its conservative financial policy with a net cash position, above-industry-average profitability, and strong cash flow generation over the next two years. On Nov. 29, 2021, S&P Global Ratings assigned its 'A-' long-term issuer credit rating to Fii. We also assigned our 'A-' long-term issue rating to the company's proposed guaranteed senior

...- We view Foxconn Industrial Internet Co. Ltd. (Fii) as a core subsidiary of Hon Hai Precision Industry Co. Ltd. (Hon Hai Group; A-/Stable/--). The electronics manufacturing services (EMS) provider accounts for about half of the group's EBITDA. - China-based Fii has strong manufacturing technology, efficient operations, and good customer relationships. This is partly tempered by customer concentration and significant exposure to the volatile smartphone end-market. - We expect Fii to maintain its conservative financial policy with a net cash position, above-industry-average profitability, and strong cash flow generation over the next two years. - On Nov. 29, 2021, S&P Global Ratings assigned its 'A-' long-term issuer credit rating to Fii. We also assigned our 'A-' long-term issue rating to the company's proposed guaranteed senior unsecured medium-term note (MTN) program. - The stable outlook reflects Fii's core status within the Hon Hai Group....

Research Update