The Short Answer
Fabrinet stock (FN) is qualitatively halal, but the current quantitative result is methodology-dependent. The March 27, 2026 filing passes the known FTSE and Malaysia ratios, while the MSCI receivables-plus-cash screen fails at 36.05%.
Current quantitative Sharia screen
Based on 10-Q figures for the period ended 2026-03-27; calculated 2026-07-15.
0 / 3,508.986
945.236 / 3,508.986
1,265.106 / 3,508.986
7.421 / 1,214.293
- Financial
- Pass
- Overall
- Incomplete
Debt/assets is 0.00%, liquidity/assets is 26.94%, receivables-plus-cash/assets is 36.05% and interest income is 0.61%; known financial ratios pass but activity remains incomplete.
- Financial
- Fails
- Overall
- Fails
Receivables-plus-cash/assets is 36.05%, above the examined MSCI total-assets limit; this is not an index-membership claim.
- Financial
- Pass
- Overall
- Incomplete
Known debt, liquidity and income ratios pass the examined Malaysia limits; activity remains incomplete and this is not an official classification.
- Financial
- Not calculated
- Overall
- Fails
A licensed historical market-cap series is not stored; the MSCI receivables-plus-cash screen already fails.
Business-activity disclosure
Fabrinet provides precision optical, electro-mechanical and electronic manufacturing services for technology customers. Contract manufacturing is generally permissible, while customer products and end uses are not reduced to a universal prohibited-revenue numerator.
Limitation: The filing does not classify every customer product or end use by a universal Sharia category; activity remains qualitative.
Purification
Fabrinet discloses $7.421 million of interest income, but ZakatInvest does not prescribe a scholar-approved purification percentage.
Inputs, assumptions and primary sources
- Amounts are USD millions from Fabrinet's March 27, 2026 Form 10-Q.
- No interest-bearing debt is reported; operating lease liabilities are excluded.
- Cash is $356.562 million and short-term investments are $588.674 million.
- Trade accounts receivable, net is $908.544 million and third-quarter revenue is $1,214.293 million.
- The filing discloses $7.421 million of interest income, or 0.61% of quarterly revenue; no fixed purification percentage is prescribed.
- Precision optical, electro-mechanical and electronic manufacturing is generally permissible, but customer end uses remain qualitative.
This is a reproducible financial screen, not a fatwa. A failed total-assets screen can coexist with a pass under a market-cap methodology. ZakatInvest keeps the qualitative assessment separate so numerical thresholds do not erase material context.
Providing precision optical and electro-mechanical manufacturing services is generally permissible. The filing shows no interest-bearing debt, but cash and short-term investments are substantial, and the disclosed interest-income ratio is 0.61% of quarterly revenue. No universal prohibited-revenue numerator is disclosed, so the qualitative activity conclusion and each board's quantitative rules should be kept separate.
Sharia Screening Methodology
Islamic scholars use several criteria to screen stocks:
- Business activity screen: Is the company's primary business halal?
- Debt ratio: Total debt / market cap must be under 33%
- Interest income: Interest income / total revenue must be under 5%
- Haram revenue: Revenue from haram sources must be under 5%
- Receivables ratio: Total receivables / total assets must be under 49–70% (varies by board)
Fabrinet's Business Activity
Fabrinet provides precision manufacturing services to technology companies. Its work includes:
- Optical manufacturing: Assembly and test of optical communication components
- Electro-mechanical: Complex precision assembly for advanced products
- Supply-chain services: End-to-end manufacturing on behalf of customers
Providing contract manufacturing and assembly is permissible at the activity level — it is a general-purpose industrial-technology service.
Concerns to Be Aware Of
1. Interest Income on Cash
Fabrinet holds a substantial cash and investments balance that generates interest income. Verify the interest-income-to-revenue ratio against the 5% threshold and purify the corresponding portion of returns.
2. Debt Ratio
Fabrinet typically operates debt-free with a net-cash position, so it comfortably passes the debt screen. Still, confirm the debt-to-market-cap ratio against the 33% threshold at the time of investment.
3. Customer Concentration and Receivables
Fabrinet derives a large share of revenue from a small number of major optical-component customers, and as a contract manufacturer it carries meaningful receivables and inventory. Verify the receivables-to-assets ratio against the chosen board's threshold. Concentration is a business consideration rather than a Sharia screen concern.
Filing-Based Ratios (March 27, 2026)
Based on Fabrinet's Form 10-Q, using total assets as the denominator where shown:
- Debt / Assets: 0.00%
- Cash + interest-bearing securities / Assets: 26.94%
- Receivables + cash / Assets: 36.05%
- Disclosed interest income / Revenue: 0.61%
Methodology Interpretation
The known FTSE and Malaysia financial ratios pass, while the MSCI receivables-plus-cash limit fails. The prohibited-activity and prohibited-revenue review remains qualitative because the filing does not provide a universal numerator. This is not a universal certification.
Bottom Line
Fabrinet (FN) has a generally permissible core business, but the current overall result fails under the examined MSCI screen because receivables plus cash are 36.05% of assets. Investors should apply the methodology they follow, review customer end uses, and address any disclosed interest income through their own purification policy.
For Muslim investors seeking optical- and manufacturing-technology exposure, FN sits alongside other halal-screened names like Lumentum (LITE) and Celestica (CLS).
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