Foxconn Industrial Internet Co., Ltd. (Industrial Fulian) (601138)

Individual Stock Analysis Report | Sector: High-end electronic manufacturing services, server and data center equipment ODM/EMS, communication network equipment manufacturing | Report Date: September 13, 2026 | Data as of September 11, 2026 close; some technical indicators and capital flow data are from public pages listed in the research notes; Bollinger Bands are self-calculated based on historical closing prices; some data may have source discrepancies.

This report is automatically compiled and generated by AI based on public information, for reference only, and does not constitute investment advice.

1. Core Summary

The most decision-relevant fundamental fact for Industrial Fulian is: AI server and data center business is becoming the core driver of performance growth. In H1 2026, the company achieved operating revenue of RMB 557.861 billion, up 54.63% year-over-year; net profit attributable to shareholders of the listed company was RMB 23.740 billion, up 95.99% year-over-year, of which cloud computing business revenue grew 75.7% year-over-year, cloud service provider AI server revenue grew approximately 2.3x year-over-year, and GPU AI rack and ASIC AI rack shipments grew 3.2x and 3x year-over-year respectively. In 2025, cloud computing business contributed revenue of RMB 602.679 billion, accounting for approximately 66.8% of main business revenue, indicating that the company's revenue structure is accelerating its tilt toward AI computing infrastructure.

The company's growth scale is significant, but its manufacturing service attributes remain pronounced. In 2025, direct material costs accounted for 92.50% of total 3C electronic product costs, with full-year overall gross margin of approximately 6.98%, of which cloud computing business gross margin was 5.73%, lower than the 9.28% of communication and mobile network equipment business; in 2025, net cash flow from operating activities was only RMB 5.238 billion, down 78.01% year-over-year, with accounts receivable of RMB 110.742 billion and inventory of RMB 150.913 billion, reflecting that the rapid expansion of AI servers has created significant occupation of inventory preparation, stockpiles, and working capital. In H1 2026, operating cash flow improved to RMB 7.391 billion, but financial expenses increased 749.91% year-over-year, and attention still needs to be paid to the impact of scale expansion on cash flow and financing costs.

Both earnings expectations and market valuation have already reflected relatively high AI prosperity expectations. Based on September 7, 2026 data, the company's stock price was RMB 66.57, PE-TTM approximately 28.16x, at a historical PE percentile of approximately 67.27%, a mid-to-high position; as of September 11, 2026 close, the price was RMB 64.07, technically above MA5, MA10, and MA200, but below MA20 and some medium-to-long-term index moving averages; MACD, Williams %R, ROC and other indicators are weak, with short-term performance showing a mixed state of medium-term support still present but insufficient momentum. Institutional average forecast for 2026 net profit attributable to parent is RMB 61.586 billion, but this forecast is not official company guidance, and the revenue and profit forecast ranges are relatively wide.

2. Company Overview

2.1 Basic Information

2.2 Main Business and Product Layout

• Cloud computing: Mainly includes servers, storage devices, cloud service equipment and their precision structural components, with key coverage of AI servers, GPU/ASIC servers, high-performance computing and data center infrastructure; 2025 revenue of RMB 602.679 billion, up 88.70% year-over-year, approximately 66.8% of main business revenue.
• Communication and mobile network equipment: Mainly includes network equipment, telecommunications equipment, switches, routers, high-precision structural components for communication network equipment, and precision structural components for consumer electronics such as smartphones; 2025 revenue of RMB 297.851 billion, up 3.46% year-over-year, approximately 33.0% of main business revenue.
• Industrial Internet: Mainly includes smart manufacturing, digital factories, industrial internet platforms and industry solutions; 2025 revenue of RMB 694 million, approximately 0.01% of main business revenue, small in scale but with strategic synergy significance.
• Other manufactured products: Including precision tools, industrial robots, and components related to servers, storage devices and cloud service equipment. The company's overall revenue is still primarily based on 3C electronic products and related hardware manufacturing.

2.3 Industry Chain Upstream/Downstream Position and Cost-Profit Structure

Industrial Fulian is positioned in the midstream of the electronic information industry chain, belonging to high-end electronic manufacturing services, server and data center equipment ODM/EMS, and communication network equipment manufacturing segments. The company itself covers server and rack system integration, network equipment manufacturing, precision structural component processing, supply chain management, global delivery and smart manufacturing solutions; upstream is mainly chips, electronic components, structural component materials and data center supporting components, while downstream is mainly global cloud service providers, communication equipment brand owners, consumer electronics brand owners and enterprise-level data center customers.

• Main procurement includes GPU, CPU, ASIC and other core chips and server motherboard-related components, as well as memory, storage, optical modules, switch chips, power supplies, connectors and other electronic components.
• Other procurement includes server racks, chassis, metal structural components, plastic parts, precision machined parts, liquid cooling and heat dissipation components, power management systems, cables, production equipment, auxiliary materials, packaging materials, as well as electricity, labor and logistics services.
• In 2025, among 3C electronic product costs, direct material costs were RMB 775.795 billion, accounting for 92.50% of total product costs; direct labor, auxiliary materials, depreciation and amortization costs were RMB 18.375 billion, RMB 8.850 billion and RMB 5.765 billion respectively, accounting for 2.19%, 1.06% and 0.69% respectively.
• The company's bargaining power over general standardized components mainly comes from procurement scale and supply chain integration; for GPU, advanced AI chips and other key components, it is more of a supply chain collaborator and large-customer project manufacturer, typically without the ability to dictate chip prices.
• In 2025, the top five suppliers' procurement amount was approximately RMB 514.956 billion, accounting for 58.36% of annual total procurement; the company disclosed that no single supplier's procurement proportion exceeded 50%. This data is on a 2025 annual basis, specific supplier names were not disclosed, and it is not possible to judge each supplier's specific bargaining power based on this.
• Downstream customers mainly include global cloud service providers and data center customers, global communication network equipment brand owners, global consumer electronics brand owners, and manufacturing customers purchasing industrial internet platforms, digital factories and smart manufacturing solutions.
• In 2025, the top five customers' sales amount was approximately RMB 559.854 billion, accounting for 62.01% of annual total sales; the company disclosed that no single customer's sales proportion exceeded 50%. This data is on a 2025 annual basis; the annual report did not disclose the names of the top five customers or their specific revenue proportions, and it is not possible to judge a single customer's true bargaining power based solely on the public annual report.
• AI infrastructure products such as servers and switches adopt customer customization and joint development models, with technical certification, delivery capability, scale manufacturing and supply chain management forming certain customer stickiness.
• The company mainly provides ODM/EMS manufacturing services, with brand and final product pricing power more in the hands of cloud service providers, communication equipment brand owners and consumer electronics brand owners; consumer electronics precision manufacturing also faces pressure from customer price reduction, product cycle fluctuations and relatively high brand customer concentration.
• The company is not a typical brand owner or core chip supplier, and is overall in the system manufacturing and integration segment of the midstream hardware industry chain; industry profit margins are typically lower than chip design, chip manufacturing and software platforms.
• As of December 31, 2025, accounts receivable were RMB 110.742 billion, approximately 12.27% of annual operating revenue, approximately 3.14x net profit attributable to parent; inventory was RMB 150.913 billion, approximately 16.71% of annual operating revenue; accounts payable were RMB 137.955 billion, approximately 16.43% of annual operating costs; net cash flow from operating activities was RMB 5.238 billion, down 78.01% year-over-year. The annual report noted that the decline in operating cash flow was mainly related to AI server market growth and increased inventory preparation by the company. The data indicates that the company needs to prepare substantial raw materials, work-in-progress and finished goods inventory for large customer orders, while being able to utilize supplier payment terms to form certain accounts payable financing; the rapid expansion of AI servers will significantly amplify working capital occupation and inventory fluctuations.
• In 2025, the top five suppliers' procurement amount accounted for 58.36% of annual total procurement, and the top five customers' sales amount accounted for 62.01% of annual total sales; both data points are on a 2025 annual basis, with sources listed in the notes mainly being related disclosures in the company's 2025 annual report. The annual report did not disclose specific customer and supplier names, nor did it provide their respective specific revenue or procurement proportions, so it is not possible to judge a single customer's or supplier's true bargaining power based on this.

Industrial Fulian is located in the midstream of the industry chain, belonging to a "large-scale manufacturing + system integration + supply chain management" model, neither an upstream chip and basic resource enterprise nor a downstream brand owner with terminal brand premium. Its direct materials account for 92.50% of total product costs, and overall gross margin is lower than chip, software and brand terminal enterprises. Further improving profit margins mainly depends on increasing the proportion of high-value-added businesses such as AI servers, high-speed switches, liquid cooling systems, joint design and industrial internet solutions, as well as scale effects, capacity utilization improvement, key component cost control and supply chain management improvements. The industrial internet business has higher gross margins, but its current revenue scale is small, with limited contribution to overall profit.

3. Financial Data and Valuation Analysis

3.1 Recent Operating Performance

The 2026 semi-annual report was disclosed between August 11-12, 2026, unaudited. H1 2026 non-GAAP net profit attributable to parent was RMB 22.984 billion, up 96.99% year-over-year; full year 2025 non-GAAP net profit attributable to parent was RMB 34.188 billion, up 46.02% year-over-year. H1 2026 basic earnings per share was RMB 1.20, weighted average return on equity was 13.36%.

In H1 2026, both revenue and profit achieved rapid growth, with net profit attributable to parent growth significantly higher than revenue growth, mainly driven by AI servers, GPU/ASIC computing equipment and high-speed network products. Cloud computing business revenue grew 75.7% year-over-year, cloud service provider AI server revenue grew approximately 2.3x year-over-year, and GPU AI rack and ASIC AI rack shipments grew 3.2x and 3x year-over-year respectively. Net cash flow from operating activities was RMB 7.391 billion, up 425.32% year-over-year; R&D expenses were RMB 4.998 billion, down 1.91% year-over-year; financial expenses were RMB 1.912 billion, up 749.91% year-over-year. Related businesses are significantly affected by cloud vendor capital expenditures, customer order节奏 and product price changes, and future performance may fluctuate.

3.2 Earnings Forecast

Forecast data comes from Tonghuashun F10 statistics as of September 7, 2026; within the past 6 months, a total of 23 institutions forecast 2026 performance and 22 institutions forecast 2028 performance. The above data is market forecast formed from institutional research report excerpts, not official company guidance. 2026 operating revenue forecast range is approximately RMB 13.1 trillion to RMB 15.6 trillion; net profit attributable to parent forecast ranges are RMB 52.093 billion to RMB 66.710 billion for 2026, RMB 63.820 billion to RMB 95.300 billion for 2027, and RMB 75.413 billion to RMB 135.900 billion for 2028.

3.3 Valuation Level and Institutional Ratings

As of September 7, 2026 close, the stock price was RMB 66.57, total market capitalization approximately RMB 1.32 trillion, PE-TTM 28.16x, PB 7.52x, dividend yield approximately 1.47%. Based on institutional average EPS forecasts, forecast PE for 2026-2028 is approximately 21.47x, 15.74x and 12.42x respectively. Historical PE-TTM percentile is approximately 67.27%, with historical 20%, 50% and 80% percentile PE at approximately 16.85x, 21.76x and 35.22x respectively; current valuation is above the historical median but below the historical 80th percentile, at a historical mid-to-high position. Domestic institutional average target price is RMB 82.36 to RMB 83.35, corresponding to approximately 23.7% to 25.2% implied upside from the current stock price; Goldman Sachs separately gave a target price of RMB 121, which should not be directly merged with the domestic institutional average target price. Current valuation incorporates relatively high AI computing prosperity expectations; if cloud vendor capital expenditures slow, customer orders adjust, product prices decline, or gross margin improvement falls short of expectations, actual earnings and valuation center may be lower than institutional forecasts.

4. Recent News and Announcements

4.1 Company Identity Confirmation

601138.SH = Foxconn Industrial Internet Co., Ltd., abbreviated as "Industrial Fulian," listed on the Shanghai Stock Exchange Main Board, registered in Shenzhen. Main businesses: cloud computing (primarily AI servers), communication and mobile network equipment, and industrial internet. Controlling shareholder is China Galaxy Enterprises Limited, with the ultimate related party being Taiwan's Hon Hai Precision (2317.TW).

4.2 H1 2026 Earnings Pre-Increase Announcement (Announcement No. 2026-033, disclosed on the evening of 2026-07-09, published 2026-07-10)

Estimated H1 2026 net profit attributable to parent of RMB 23.4 billion to RMB 24.4 billion, up 93% to 101% year-over-year; non-GAAP RMB 22.7 billion to RMB 23.7 billion, up 94% to 103% year-over-year. Estimated Q2 2026 single-quarter net profit attributable to parent of RMB 12.8 billion to RMB 13.8 billion, up 86% to 101% year-over-year; Q2 non-GAAP RMB 12.4 billion to RMB 13.4 billion, up 84% to 99% year-over-year. Prior year same period (H1 2025): net profit attributable to parent RMB 12.113 billion, non-GAAP RMB 11.668 billion, EPS RMB 0.61. Company-stated drivers: H1 2026 cloud service provider AI server revenue up over 230% year-over-year; 800G and above data center switch shipments up 1.4x year-over-year; next-generation products jointly developed with major customers expected to gradually enter mass production in H2. Media emphasized: this is the first time Industrial Fulian's semi-annual net profit exceeded RMB 20 billion, a record high since listing.

4.3 H1 2026 Semi-Annual Report (Official Disclosure, Mid-August 2026)

H1 2026 revenue RMB 557.86 billion, up 54.6% year-over-year; net profit attributable to parent RMB 23.74 billion, up 96% year-over-year (within the pre-announcement range of RMB 23.4 billion to RMB 24.4 billion, validating the pre-announcement). Reference: Q1 2026 revenue RMB 251.078 billion (+56.52%), net profit attributable to parent RMB 10.595 billion (+102.55%).

4.4 2025 Annual Report (Background, Disclosed 2026-03-10)

Full year 2025 revenue RMB 902.887 billion, up 48.22% year-over-year; net profit attributable to parent RMB 35.286 billion, up 51.99% year-over-year. 2025 cloud computing business revenue RMB 602.679 billion (+88.70%), communication and mobile network equipment RMB 297.851 billion (+3.46%).

4.5 Share Repurchase Plan (Approved by Board 2026-07-27, Disclosed 2026-07-28; Board Resolution Announcement 2026-035, Repurchase Report 2026-036)

Amount: no less than RMB 1 billion and no more than RMB 2 billion (inclusive), own funds, centralized bidding trading. Price ceiling: RMB 103/share (already adjusted downward by per-share dividend of RMB 0.65; before adjustment was RMB 103.65/share). Quantity estimate: approximately 9.71 million to 19.42 million shares, approximately 0.05% to 0.10% of total share capital. Term: 2026-07-27 to 2026-10-26 (3 months from board approval date). Purpose: to safeguard company value and shareholder rights, repurchased shares to be sold, unsold portion to be cancelled in accordance with law upon expiration. Trigger background: the announcement stated the company's "stock closing price cumulative decline reached 20% over the recent continuous twenty trading days." Reduction commitment: as of the board approval date, directors, supervisors and senior management, controlling shareholder and concerted parties, and shareholders holding 5% or more had no reduction plans within the next 3 months and 6 months.

4.6 Repurchase Implementation Progress (As of Early September 2026)

First repurchase: 2026-08-19, repurchased 2.4144 million shares (0.01% of total share capital), price range RMB 61.35 to RMB 61.97/share, amount approximately RMB 149 million (Announcement 2026-043, disclosed 2026-08-20). Monthly progress: August 2026 single month repurchase of 14.010229 million shares (0.07%), price range RMB 59.91 to RMB 66.40/share, amount RMB 886.7 million. Cumulative (as of 2026-08-31): cumulative repurchase of 14.0102 million shares (0.07%), amount approximately RMB 887 million (Announcement 2026-044, disclosed 2026-09-03). Historical cumulative: the company stated cumulative repurchases since listing exceeded RMB 2.2 billion, cumulative cash dividends RMB 76 billion (media framing, not directly from announcement figures, single source, for reference only).

4.7 Previous Repurchase Round (Background)

Previous repurchase implementation deadline 2026-03-31, total repurchase amount approximately RMB 500 million, purpose to reduce registered capital (Source: China Fund News, single source, recommended to verify with announcements).

4.8 2025 Annual Equity Distribution Implementation Announcement (Announcement 2026-034, Disclosed 2026-07-23/24)

Cash dividend of RMB 6.5 per 10 shares (tax inclusive), i.e., RMB 0.65/share; record date 2026-07-31, ex-dividend date 2026-08-03; based on total share capital of 19,844,092,284 shares, total distribution of approximately RMB 12.90 billion (RMB 12,898,659,984.60). Total 2025 cash dividend of RMB 19.451 billion, accounting for 55.12% of 2025 net profit attributable to parent (including prior interim dividend of RMB 6.55 billion). Note: dividend implementation caused total share capital to adjust from 19,858,195,781 shares to 19,844,092,284 shares (including repurchased share cancellation), so the final distribution amount was adjusted accordingly.

4.9 Board Re-election (2026 First Extraordinary Shareholders' Meeting, 2026-07-07)

Reviewed board re-election: Zheng Hongmeng, Huang Decai, Yang Qiujin, Xu Xingren, Ding Zhaobang elected as the fourth session non-independent directors; Li Xin, Li Dan, Liao Cuiping elected as independent directors (5 non-independent + 3 independent to be elected); also reviewed the revision of the "Directors and Senior Management Compensation Management System." Announcement No. 2026-029 (notice). Subsequent: the fourth board of directors second meeting was held on 2026-07-27 by written circulation, with all 9 directors unanimously passing the repurchase proposal.

4.10 Cancellation of Supervisory Board (2025-11-24 2025 Second Extraordinary Shareholders' Meeting)

Passed the "Cancellation of Supervisory Board and Revision of the Articles of Association" proposal, revision of shareholders' meeting rules of procedure/board meeting rules of procedure, and the 2025 semi-annual profit distribution plan. Attending shares accounted for 89.3253% of total voting rights.

4.11 Regarding Share Reductions

No announcements of controlling shareholder/director/supervisor/senior management reductions were found; on the contrary, the repurchase plan explicitly stated that relevant shareholders had no reduction plans within 3 months/6 months (as of 2026-07-27). This search is incomplete; no actual reduction or increase records were found.

4.12 Announcement on Increasing 2025 Annual Daily Related-Party Transaction Limit (Announcement Lin 2025-089, Disclosed 2025-12-30)

Approved at the third board of directors thirtieth meeting on 2025-12-27, increasing the company's daily related-party transaction limit with Hon Hai Precision and its subsidiaries/joint ventures (selling goods to related parties, purchasing goods from related parties). No shareholders' meeting review required, 7 votes unanimously passed. Related party Hon Hai Precision (2317.TW) as of 2025-09-30 total assets NT$4,894,454,915 thousand, net assets NT$1,636,166,359 thousand, revenue NT$5,496,732,736 thousand, net profit attributable to parent NT$144,141,397 thousand; Hon Hai Precision indirectly holds 100% equity of the company's controlling shareholder China Galaxy Enterprises Limited.

4.13 Rumor Clarification/Investor Relations (2025-11-14 Earnings Briefing)

Regarding market rumors of "order or outlook downgrade," the company responded "has not issued any related口径, existing customer project progress and delivery节奏 are normal," and stated new product progress is smooth and market rumors need not be over-interpreted. Single source, company oral response, not an announcement.

4.14 Capital Flow/Stock Price (Market Reaction Related to News, Not Announcements)

2026-07-27 close RMB 61.55, total market capitalization approximately RMB 1.22 trillion (repurchase announcement published same day). 2026-08-19 close RMB 61.83, down 6.6% that day, market capitalization approximately RMB 1.23 trillion; first repurchase disclosed that evening. 2026-09-11: main force capital net sell of RMB 134 million (single source, third-party capital flow statistics, recommended to cross-reference with multiple sources). The above prices are media paraphrases, not directly read from market data sources, and are snapshots of specific dates; specific data should be based on exchange quotes.

4.15 Institutional Views (For News Background, Forecasts Not Announcements)

After the 2026-07-09 earnings pre-announcement, Huachuang Securities (Strong Push, 2026-2028 net profit attributable to parent RMB 64.597/86.866/109.491 billion), CICC (Outperform, target price RMB 77.68, 2026/27 net profit attributable to parent RMB 65.0/89.8 billion), Huatai (Buy, target price RMB 93, 2026-2028 net profit attributable to parent RMB 56.01/67.49/77.96 billion) and others published comments. 21st Century Business Herald cited Wind: in the past six months, 21 brokerages forecast 2026 full-year net profit average of RMB 61.242 billion, up 73.56% year-over-year (multi-brokerage consensus口径).

4.16 Uncertainties and Items to Be Supplemented

1) Insufficient search coverage: due to search round limitations, the following directions were not fully expanded, recommended to supplement subsequently — (a) latest announcements/news for September 2026; (b) clear shareholder reduction or increase announcements (this note only confirms the "no reduction plan" commitment, no actual reduction/increase records found); (c) merger/acquisition/material asset restructuring announcements (no related matters found, does not mean they do not exist); (d) regulatory inquiry/penalty/policy news (no regulatory matters targeting the company found). 2) Single-source data should be treated with caution: "cumulative repurchases exceeding RMB 2.2 billion, cumulative dividends RMB 76 billion" since listing, previous repurchase "RMB 500 million, deadline 2026-03-31," "2026-09-11 main force capital net sell of RMB 134 million" are all media reports or third-party statistics, not cross-verified with original announcements. 3) Time口径: this note's "recent" is mainly based on announcements from 2026-07 to early 2026-09; please refer to the respective "as of" dates marked; if the current time is later than 2026-09-11, it is necessary to reconfirm whether there are new Q3 earnings pre-announcements, repurchase progress (disclosed in the first 3 trading days of each month for the previous month-end progress), temporary announcements, etc. 4) Distinction of performance figures nature: H1 2026 RMB 23.4 billion to RMB 24.4 billion is "earnings pre-announcement (unaudited)," RMB 23.74 billion is "semi-annual report official disclosure"; 2025 annual dividend ratio and repurchase amount are company announcement facts, institutional earnings forecasts (such as RMB 61.242 billion, RMB 65.0 billion, etc.) are forecast values, not disclosed data.

5. Stock Price Trend and Technical Analysis

5.1 Price Overview

5.2 Technical Indicators

As of September 11, 2026, Industrial Fulian's stock price retraced after the September 7 volume rise, currently attempting to stabilize near RMB 64. The closing price regained MA5, MA10, MA50, MA100 and MA200, but remains below MA20, with pressure from MA20, EMA20 and EMA200 near the RMB 64.2 to RMB 64.7 area. RSI is neutral, MACD, Williams %R, ROC and Bull/Bear Power are weak, StochRSI and some moving average signals are strong, with technicals showing a mixed state of "medium-term support still present, short-term momentum insufficient." Bollinger Bands show the stock price slightly above the middle band, but has not yet re-entered a strong trending upward state. On the capital side, after the September 7 volume rise, main force capital flow has reversed, with September 11 Securities Star口径 showing main force capital net outflow of approximately RMB 134 million. Overall, in the short term, more attention should be paid to volume-price changes between the RMB 63.4 to RMB 63.9 support and the RMB 64.9 to RMB 65.7 pressure, and trends cannot be judged solely based on a single-day rise or a single capital platform's data.

5.3 Short-Term Trend Outlook (Next Week, Scenario Deduction, For Reference Only)

⚠️ Risk Warning: The following content is only a subjective scenario deduction based on September 11, 2026 closing data, historical prices and technical indicators, does not constitute investment advice, and does not represent a deterministic prediction of future prices.

① Key Technical Levels

② Next Week Scenarios (Subjective Weights, Not Statistical Probabilities)

• Consolidation (relatively high weight, approximately 60%; this weight is a subjective heuristic judgment based on current technical pattern and capital flow, not statistical probability): Reference price range RMB 63.4~65.7. Trigger conditions include stock price holding the RMB 63.4~63.9 support area, turnover maintaining approximately RMB 4 billion~7 billion, MACD not showing significant accelerated decline, and AI computing, communication equipment and other weighted technology sectors not showing obvious collective weakness.
• Weaker downward (medium weight; subjective heuristic judgment, not statistical probability): Reference price range RMB 61.8~63.4. Trigger conditions include continuous closing below RMB 63.4, main force capital continuous net outflow, single-day turnover expanding to above RMB 7 billion but stock price closing down, or technology growth sector and broad market weighted stocks weakening simultaneously. If RMB 62.5 is also broken with volume, downside can continue to observe RMB 61.8 to RMB 60.4 area.
• Rebound strengthening (low to medium weight; subjective heuristic judgment, not statistical probability): Reference price range RMB 65.0~66.9. Trigger conditions include effectively breaking through and holding above RMB 64.9~65.0, single-day turnover re-expanding to above RMB 7 billion, main force capital turning from net outflow to continuous net inflow, and Zhongji Innolight, Eoptolink, T&S Communications and other high-prosperity computing and optical communication directions strengthening simultaneously. If volume holds above RMB 65.0, short-term can observe RMB 66.1~66.9; approaching RMB 66.7~67.9 area still faces recent high and Bollinger upper band pressure.

③ Capital and Liquidity Background

September 11 turnover rate approximately 0.38%, turnover approximately RMB 4.826 billion, recent days' turnover fluctuating between approximately RMB 3.640 billion and RMB 11.506 billion. On September 7 volume rise, turnover was approximately RMB 11.506 billion, then turnover declined, stock price retraced from RMB 66.57 to near RMB 64. Company total share capital approximately 19.844 billion shares, circulating market capitalization approximately RMB 1.27 trillion; relative to its mega market cap, daily turnover rate is low, indicating overall chip turnover is not sufficient, short-term price changes more reflect marginal trading by weighted capital and sector capital, rather than large-scale exchange of broad chips. On shareholder data, as of June 30, 2026, number of shareholder accounts approximately 821,500, top ten shareholders collectively held approximately 85.28%, mainly controlling group affiliated companies and strategic shareholders; this data has quarterly lag, cannot fully represent the current chip structure as of September 11, 2026. Number of shareholder accounts increased approximately 13.7% from end-March 2026, showing market participants have somewhat spread, but overall equity structure remains relatively concentrated.

The volume confirmation signal to check is: if subsequent single-day turnover continuously reaches above RMB 7 billion, while stock price closes above RMB 65.0, and main force capital continuously net inflows, this can be regarded as a signal of significant recovery in short-term capital participation; if turnover expands but stock price closes down, it more likely represents selling pressure release, and should not be interpreted solely as capital involvement.

④ Key Points to Watch (Observation Ideas Only, Not Operational Instructions)

• Observe whether the RMB 64.9~65.7 pressure area can be broken through with volume; this content is an observation idea, not an operational instruction.
• Observe whether the RMB 63.4~63.9 area can stabilize with reduced volume; this content is an observation idea, not an operational instruction.
• If the RMB 62.5~62.7 area is broken with volume, watch the risk of retesting toward RMB 61.8 and approximately RMB 60; this content is an observation idea, not an operational instruction.
• Observe whether turnover can continuously expand to above RMB 7 billion, and appear simultaneously with continuous main force capital net inflow; this content is an observation idea, not an operational instruction.

The above scenario deduction is based on September 11, 2026 closing data and historical price, technical indicator calculations; short-term stock prices will also be disturbed by multiple factors such as news, capital, and broad market environment; technical indicators themselves have lag and limitations, do not constitute a guarantee of future actual trends, and do not constitute buy or sell recommendations; please combine with the latest market information to make independent judgments and bear investment risks yourself.

6. Industry Landscape and Competitor Analysis

6.1 Industry Status

Industrial Fulian's industry covers AI servers and data center equipment, high-speed switches and AI networking, traditional consumer electronics precision manufacturing and industrial internet. Core industry drivers include generative AI, large model training and inference, cloud service provider capital expenditures, data center network upgrades and manufacturing digital transformation. In the 2025 annual report, the company believed that global AI server demand continues to grow, liquid cooling and other efficient heat dissipation technologies are accelerating adoption, and AI infrastructure is evolving from general computing to high-performance computing.

6.2 Competitive Landscape

• AI server and data center equipment customers are concentrated among global large cloud service providers and technology brand owners, products are highly customized, requiring long-term certification and joint development; GPU, ASIC, HBM, network chips and liquid cooling systems are key supply chain segments.
• Core competitive factors in AI infrastructure manufacturing include manufacturing scale, delivery speed, global layout, quality control, supply chain management and customer collaborative development; industry profit margins are typically lower than chip design, chip manufacturing and software platforms.
• The high-speed switch field is upgrading toward 400G, 800G and even 1.6T, with Ethernet, InfiniBand, NVLink Switch, CPO/NPO and other technology routes coexisting; competitive factors include high-speed product R&D, network chip adaptation, optoelectronic interconnection, thermal design, reliability certification and large-scale delivery capability.
• The traditional consumer electronics precision manufacturing market is relatively mature, competition mainly relies on large customer share, precision processing techniques, yield rate, automation level and cost control, while facing factors such as customer price reduction, product cycle fluctuations and relatively high brand customer concentration.
• Industrial internet is in a transition stage from pilot demonstration to scale implementation, with participants including industrial software companies, automation equipment manufacturers, cloud platform companies, system integrators and large manufacturing enterprises; Industrial Fulian has large-scale manufacturing scenarios, internal factory data and smart manufacturing experience, but external revenue scale and profit model still need further verification.

6.3 Main Competitors

Industrial Fulian overlaps with Quanta Computer, Wiwynn and Inventec in servers, cloud computing equipment and electronic manufacturing services, and is comparable to Flex and Jabil in global EMS and supply chain management. Industrial Fulian's differentiated advantages are mainly reflected in global manufacturing bases under the Foxconn system, precision processing, communication network equipment, consumer electronics precision structural components and large-scale supply chain integration capability; compared to Wiwynn, which focuses on cloud data center hardware ODM, its business coverage is broader but its structure is more complex; compared to Flex and Jabil, its current performance benefits more from AI servers, data centers and communication network equipment prosperity.

7. Risk Warnings

• AI server and data center demand depends on global cloud service provider capital expenditures and customer order节奏. In H1 2026, cloud service provider AI server revenue grew approximately 2.3x year-over-year; if cloud vendor capital expenditures slow, customer orders adjust or delivery节奏 changes, the company's cloud computing business high growth may experience significant fluctuations.
• The company has relatively high revenue and customer concentration. In 2025, top five customers' sales accounted for 62.01% of annual total sales, and the company mainly provides ODM/EMS manufacturing services, with brand and final product pricing power more in the hands of cloud service providers, communication equipment brand owners and consumer electronics brand owners; if core customers reduce prices, cut procurement or change suppliers, the company's revenue and profit may be affected.
• AI server business occupies significant working capital. At end-2025, inventory was RMB 150.913 billion, accounts receivable RMB 110.742 billion, net cash flow from operating activities down 78.01% year-over-year; if order confirmation, customer payment collection or product iteration falls short of expectations, it may lead to slower inventory turnover, cash flow pressure and increased inventory impairment risk.
• The company has relatively high material cost and supply chain concentration. In 2025, direct materials accounted for 92.50% of total 3C electronic product costs, top five suppliers' procurement accounted for 58.36% of annual total procurement; supply changes or price fluctuations of GPU, CPU, ASIC, memory, storage, optical modules and network chips and other key components may compress manufacturing profits and affect delivery.
• Rapid revenue growth has not yet fully translated into high gross margin. In 2025, overall gross margin was approximately 6.98%, cloud computing business gross margin 5.73%, lower than communication and mobile network equipment business 9.28%; if AI server, rack and switch product prices decline, or scale effects and product structure upgrades fall short of expectations, the company's net profit growth may be lower than revenue growth.
• Valuation is relatively sensitive to AI performance realization. As of September 7, 2026, PE-TTM approximately 28.16x, at a historical mid-to-high position, the market has already priced in relatively high AI computing prosperity expectations; if the institutional forecast 2026 net profit attributable to parent of approximately RMB 61.586 billion is not realized, or cloud computing growth, gross margin and cash flow fall short of expectations, the valuation center may face adjustment pressure.
• The company has relatively large overseas assets. As of end-2025, overseas assets were RMB 327.160 billion, accounting for 71.71% of total assets at period end; global manufacturing, delivery and customer layout may cause the company's operating results to be affected by changes in overseas operating environment, supply chain coordination and regional delivery conditions, and the related impact cannot be further quantified in existing data.
• Industrial internet business currently has limited scale. In 2025, industrial internet revenue was only RMB 694 million, approximately 0.01% of main business revenue; despite having manufacturing scenarios and internal factory data synergy advantages, the actual contribution to the company's overall revenue and profit remains small, and future commercialization scale and profit model still have verification uncertainty.

8. Conclusion and Outlook

Industrial Fulian's growth logic mainly comes from global cloud service provider capital expenditures, AI server and GPU/ASIC computing equipment volume growth, high-speed switch upgrades, and the company's comprehensive capabilities in global manufacturing bases, precision structural components, system integration, supply chain management and customer joint R&D. H1 2026 performance growth validated the high prosperity of AI infrastructure business, 800G and above data center switch shipments grew 1.4x year-over-year, and next-generation products jointly developed with major customers are expected to gradually enter mass production in H2, also providing product and customer synergy foundation for subsequent revenue growth.

However, the company's profit quality and margin improvement still depend on product structure and manufacturing efficiency, rather than pure revenue expansion. Cloud computing business gross margin is lower than communication and mobile network equipment business, direct materials proportion is high, and top five customers' sales account for 62.01% of annual total sales, top five suppliers' procurement account for 58.36% of annual total procurement; the company's pricing power in the midstream of the ODM/EMS industry chain is relatively limited. Going forward, it is necessary to observe whether AI servers, high-speed switches, liquid cooling and joint design product volume growth can bring sustained margin improvement, and simultaneously monitor changes in inventory, accounts receivable and operating cash flow.

In outlook, if cloud vendor AI capital expenditures, customer order节奏 and next-generation product mass production progress continue to meet expectations, the company's performance still has strong growth elasticity; if capital expenditures slow, customers adjust orders or product prices decline, the relatively high valuation and low profit margin may amplify performance fluctuations. On the technical side, RMB 64.90—65.70 is the recent pressure area, RMB 63.40—63.90 is the first support area, RMB 61.80—62.70 is the stronger support area; subsequent volume-price coordination and capital flow can serve as reference for observing short-term trend changes, but cannot replace judgment on fundamental realization.

Data Sources

• Industrial Fulian (601138)_Company Announcements_Industrial Fulian: 2025 Annual Report Sina Finance_Sina
• Industrial Fulian (601138)_Prospectus Details_Industrial Fulian IPO A-Share Prospectus Sina Finance_Sina
• Industrial Fulian (601138)_Company Announcements_Industrial Fulian: 2026 Semi-Annual Report Sina Finance_Sina
• Industrial Fulian (601138)_Company Announcements_Industrial Fulian: 2026 Semi-Annual Report Sina Finance_Sina
• Industrial Fulian (601138)_Company Announcements_Industrial Fulian: 2026 Semi-Annual Report Sina Finance_Sina
• Industrial Fulian (601138)_Company Announcements_Industrial Fulian: 2025 Annual Report Summary Sina Finance_Sina
• Industrial Fulian (601138) Earnings Forecast_F10_Tonghuashun Financial Services Network
• Institutional Ratings|2 Institutions Update Industrial Fulian Rating
• Industrial Fulian (601138)_Research Report Overview_China Finance Network
• Industrial Fulian (601138) Stock Forecast and Analyst Ratings - Futu Niuniu
• Goldman Sachs Latest Assessment: After Industrial Fulian's Semi-Annual Report, the Best Is Yet to Come_Sina Finance_Sina
• Industrial Fulian (601138) PE|Valuation|Fundamentals - Lixinger
• Industrial Fulian (601138.SH) In-Depth F9-PC_HSF9 Data
• Industrial Fulian (sh601138)
• 601137 Boway Alloy
• Industrial Fulian Listed Company Information - Industrial Fulian Listed Company Information
• Industrial Fulian (601138) September 11 Main Force Capital Net Sell of RMB 134 Million - Securities Star
• Ningbo Port (601018.SH) Business Analysis-PC_HSF10 Data
• AI Server Demand Continues to Grow, Industrial Fulian (601138.SH) Q2 Revenue Breaks Through RMB 200 Billion for the First Time!
• Regaining Capital Pursuit, Industrial Fulian Hit Limit Up Intraday
• 601138 | Foxconn Industrial Internet Co. Ltd. A Profile | MarketWatch - 601138 China: Shanghai
• Foxconn Industrial Internet Co., Ltd.: azionisti, dirigenti e profilo società | 601138 | CNE1000031P3 | MarketScreener Italia - 07e35478766cdbac5e
• China Securities Journal - Foxconn Industrial Internet Co., Ltd.<BR/>Announcement on Increasing 2025 Annual Daily Related-Party Transaction Limit - | Page B059: Information Disclosure | Previous Page Next Page
• Industrial Fulian: 2025 Net Profit Up 51.99% Year-over-Year, Plans to Distribute RMB 12.9 Billion Cash Dividend
• Industrial Fulian: Foxconn Industrial Internet Co., Ltd. Third Board of Directors Thirtieth Meeting Resolution Announcement
• Industrial Fulian: Foxconn Industrial Internet Co., Ltd. 2025 Second Extraordinary Shareholders' Meeting Resolution Announcement _ Industrial Fulian (601138) _ Announcement Text - Industrial Fulian: Foxconn Industrial Internet Co., Ltd. 2025 Second Extraordinary Shareholders' Meeting Resolution Announcement View PDF Original
• Stock Code: 601138
• Industrial Fulian (601138.SH) 2025 Annual Equity Distribution: Dividend of RMB 0.65 per Share
• Foxconn Industrial Internet Co., Ltd. 2025 Annual Equity Distribution Implementation Announcement - Market
• Industrial Fulian: Foxconn Industrial Internet Co., Ltd. 2025 Second Extraordinary Shareholders' Meeting Resolution Announcement - Industrial Fulian: Foxconn Industrial Internet Co., Ltd. 2025 Second Extraordinary Shareholders' Meeting Resolution Announcement
• Industrial Fulian Responds to "Order or Outlook Downgrade" Rumors: Has Not Issued Any Related口径, Existing Customer Project Progress and Delivery节奏 Normal
• Industrial Fulian (601138) - Major Events Memo - Stock Market Center
• Industrial Fulian: Plans to Repurchase RMB 1~2 Billion of Shares, Repurchase Price Not Exceeding RMB 103/Share
• China Stock Share Repurchase Plan - Industrial Fulian - July 28, 2026 - Tonghuashun
• Foxconn Industrial Internet Co., Ltd. Repurchase Report on Share Repurchase Through Centralized Bidding Trading - Foxconn Industrial Internet Co., Ltd.
• Industrial Fulian (601138.SH) Plans to Repurchase RMB 1 Billion to RMB 2 Billion of Shares
• Industrial Fulian: Foxconn Industrial Internet Co., Ltd. Fourth Board of Directors Second Meeting Resolution Announcement_Jiufang Zhitou
• A-Share Trillion Leader! Major Repurchase
• Industrial Fulian (601138): Foxconn Industrial Internet Co., Ltd. Fourth Board of Directors Second Meeting Resolution
• Industrial Fulian Plans to Repurchase RMB 1 Billion—RMB 2 Billion of Shares
• Industrial Fulian: Foxconn Industrial Internet Co., Ltd. Notice on Convening 2026 First Extraordinary Shareholders' Meeting_Jiufang Zhitou - Global Index
• Industrial Fulian: Expected H1 Net Profit Up 93%-101% Year-over-Year, 800G and Above Data Center Switch Shipments Up 1.4x Year-over-Year - Cailian Press
• China Securities Journal - Foxconn Industrial Internet Co., Ltd.<BR/>Announcement on Share Repurchase Progress
• 601138, First Repurchase Nearly RMB 150 Million! A-Share Companies, Acting Intensively
• Industrial Fulian First Repurchase Nearly RMB 150 Million! A-Share Companies Acting Intensively - Industrial Fulian First Repurchase Nearly RMB 150 Million
• Industrial Fulian, Sungrow Power Supply, Midea Group Disclose Repurchase Progress
• Trillion Giant, Acts on Repurchase!
• Industrial Fulian First Round Repurchase Landed, Spent Approximately RMB 149 Million to Repurchase 2.41 Million Shares
• China Securities Journal - Foxconn Industrial Internet Co., Ltd. Announcement on First Share Repurchase Through Centralized Bidding Trading
• AASTOCKS Financial News - Quick Quote
• 601138, First Repurchase Nearly RMB 150 Million! A-Share Companies, Acting Intensively - Economic News Rolling > Text
• 601138, First Repurchase Nearly RMB 150 Million! A-Share Companies, Acting Intensively - Securities Star
• Industrial Fulian (601138) 2026 Semi-Annual Earnings Pre-Announcement Review: AI Servers & High-Speed Switches Continue High Prosperity, 26H1 Performance High Growth
• Industrial Fulian: Expected H1 2026 Net Profit RMB 23.4 Billion-RMB 24.4 Billion, Up 93%-101% Year-over-Year
• Industrial Fulian: Foxconn Industrial Internet Co., Ltd. 2026 Semi-Annual Earnings Pre-Increase Announcement _ Industrial Fulian (601138) _ Announcement Text - Industrial Fulian: Foxconn Industrial Internet Co., Ltd. 2026 Semi-Annual Earnings Pre-Increase Announcement View PDF Original
• Industrial Fulian (601138): 2Q26 Earnings Pre-Announcement Beats Expectations, Bullish on RUBIN Rack/CPO Switch Volume Growth
• Industrial Fulian (601138): AI Drives 1H26 Net Profit Pre-Increase of 93%-101% Year-over-Year
• Industrial Fulian: Foxconn Industrial Internet Co., Ltd. 2026 Semi-Annual Earnings Pre-Increase Announcement
• Industrial Fulian: 2026 Semi-Annual Net Profit Pre-Increase of 93%-101%
• Industrial Fulian: Expected H1 Net Profit Attributable to Parent RMB 23.4 Billion-RMB 24.4 Billion, Cloud Service Provider AI Server Revenue Up Over 230% Year-over-Year
• Trillion Market Cap Giant, Pre-Increase Doubles! - Trillion Market Cap Giant, Pre-Increase Doubles!
• Expected to Earn RMB 24.4 Billion in H1, How Does Industrial Fulian Do It? - Expected to Earn RMB 24.4 Billion in H1, How Does Industrial Fulian Do It?

This report is automatically retrieved, compiled and generated by AI based on public channel information, with information as of Data as of September 11, 2026 close; some technical indicators and capital flow data are from public pages listed in the research notes; Bollinger Bands are self-calculated based on historical closing prices; some data may have source discrepancies., and may have timeliness differences; specific data should be based on the company's official announcements and authoritative data terminals. This report is only for information compilation and research reference, does not constitute any investment advice, and investors should make independent judgments and bear investment risks themselves.