FII(SH:601138)2025-08-14 02:44Summary of Foxconn Industrial Internet Co. Ltd. Earnings Call Company Overview - Company: Foxconn Industrial Internet Co. Ltd. - Industry: Greater China Technology Hardware - Market Cap: US$95,655 million - Stock Rating: Overweight - Price Target: Rmb33.00 - Current Price: Rmb36.59 Key Financial Results - 2Q25 Operating Profit: Rmb8,687 million, a 24% beat to estimates, up 32% QoQ and 78% YoY [1] - Operating Margin: Expanded by 0.2 percentage points QoQ and 1 percentage point YoY to 4.3% [1] - Revenue: Rmb200 billion, 7% below estimates [1] - Net Profit: Rmb6,883 million, or EPS of Rmb0.35, 1% higher than expectations [1] Revenue Growth Areas - Cloud Equipment Revenue: Increased by over 50% YoY in 2Q25, with AI server revenue growing over 60% YoY [2] - CSP Customer Revenue: Grew by over 150% YoY [2] - Telecom and Networking Equipment: Shipments increased significantly, with 800G network switch revenue in 2Q25 being three times that of the full year 2024 [3] - Precision Component Business: Grew by 17% YoY in 1H25, driven by AI smartphone demand [3] Future Outlook - Management Expectations: Anticipates continued growth in shipment volume for GB200 server rack projects due to improved integration yields [2] - Margin Trend and Business Outlook: Awaiting management comments on margin trends and business outlook for 2H25/2026 [6] Valuation and Risks - Valuation Methodology: Based on a multi-stage residual income (RI) valuation model with a 10% cost of equity and a medium-term growth rate of 14% [9][10] - Upside Risks: Faster project wins in IIoT solutions, lower competition, and stronger macro outlook [10] - Downside Risks: Slow project wins, increased competition, and weaker macro outlook [10] Additional Information - Fiscal Year Ending: December 2024 - Projected EPS: Rmb1.17 for FY24, increasing to Rmb2.19 by FY27 [4] - EBITDA Projections: Expected to grow from Rmb33,432 million in FY24 to Rmb56,244 million by FY27 [4] This summary encapsulates the key points from the earnings call, highlighting the financial performance, growth areas, future outlook, and valuation risks associated with Foxconn Industrial Internet Co. Ltd.