ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Hon Hai Precision Industry Co's annualized return on capital (ROC %) for the quarter that ended in Dec. 2025 was 10.15%.
As of today (2026-06-25), Hon Hai Precision Industry Co's WACC % is 7.81%. Hon Hai Precision Industry Co's ROC % is 9.68% (calculated using TTM income statement data).
Hon Hai Precision Industry Co generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Hon Hai Precision Industry Co (LSE:HHPD) ROC % Explanation
ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Hon Hai Precision Industry Co's WACC % is 7.81%. Hon Hai Precision Industry Co's ROC % is 9.68% (calculated using TTM income statement data).
Hon Hai Precision Industry Co generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Hon Hai Precision Industry Co ROC % Related Terms
Hon Hai Precision Industry Co ROC % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Note:
The Operating Income data used here is four times the quarterly (Dec. 2025) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Hon Hai Precision Industry Co (LSE:HHPD) has a ROC % of 10.15% as of Dec. 2025. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Hon Hai Precision Industry Co and its competitors.
Is Hon Hai Precision Industry Co's ROC % too high?
Hon Hai Precision Industry Co's current ROC % is 10.15%. The Hardware industry median ROC % is 4.12. Hon Hai Precision Industry Co's value of 10.15% is 146.7% above this industry median. Overall, Hon Hai Precision Industry Co has a GF Score™ of 90/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Hon Hai Precision Industry Co's ROC % compare to APH and GLW?
Hon Hai Precision Industry Co's ROC % of 10.15% can be compared against companies in the Hardware industry. The industry median ROC % is 4.12. Hon Hai Precision Industry Co's value of 10.15% is 146.7% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for a Hardware company?
The median ROC % among Hardware companies is 4.12, based on 2,444 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Hon Hai Precision Industry Co's current ROC % of 10.15% is 146.7% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Hon Hai Precision Industry Co and its competitors. For the Hardware industry, the median ROC % is 4.12 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Hon Hai Precision Industry Co's current ROC % is 10.15%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Hon Hai Precision Industry Co stock overvalued right now?
Based on GuruFocus' analysis, Hon Hai Precision Industry Co (LSE:HHPD) is currently considered Modestly Overvalued. The stock's GF Value™ is $14.08, compared to a current price of $16.26 — trading 15.5% above its estimated fair value. The current ROC % is 10.15% and 146.7% above the Hardware industry median of 4.12. Hon Hai Precision Industry Co's overall GF Score™ is 90/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For Hon Hai Precision Industry Co (LSE:HHPD), the current ROC % is 10.15% as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Hon Hai Precision Industry Co (LSE:HHPD) Overvalued in 2026?
Based on GuruFocus' analysis, Hon Hai Precision Industry Co stock appears to be overvalued.
The current stock price of $16.26 is trading 15.5% above its estimated GF Value™ of $14.08.
GuruFocus considers Hon Hai Precision Industry Co to be Modestly Overvalued.
Key valuation signals for LSE:HHPD:
ROC %: 10.15%
GF Value™: $14.08 vs. price of $16.26 (15.5% above fair value)
Industry Position: 146.7% above the Hardware median
No single metric tells the full story. See the LSE:HHPD stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Hon Hai Precision Industry Co Business Description
Hon Hai Precision is the world's largest contract manufacturer of consumer electronics, communications, and computer products. It is the biggest supplier to Apple, whose business accounted for around 50% of overall revenue in 2025. Hon Hai is also involved in the production of upstream components such as electronic connectors, semiconductor packaging, and metal casings for smartphones, as well as producing servers. These upstream activities are mainly conducted through its listed majority-owned subsidiaries Foxconn Industrial Internet and FIH Mobile. In response to its traditional end markets of computers, smartphones, and telecom equipment maturing in 2019 it started on a strategy to develop expertise in three new growth areas—electric vehicles, digital health, and robotics.
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