Foxconn Industrial Internet Co. Ltd.

Overview Key strengths Key risks Core subsidiary of Hon Hai Precision Industry Co. Ltd. High customer concentration and outsized exposure to production of smartphone mechanical parts. Leading global electronic manufacturing service (EMS) provider High capital expenditure (capex) needs for capacity expansion overseas. Above-industry return on capital backed by strong engineering expertise and efficient operations. Increasing competition and margin pressure as smartphone sales and corporate information technology (IT) spending soften. The company?s solid technological and operational expertise, coupled with its favorable relationship with key customers (including NVIDIA), will likely help it to win incremental orders as the market continues to expand. We forecast mid-to-high-double-digit revenue growth for Fii's AI-related products in 2024 and 2025; revenue from such products will likely account

...Booming artificial intelligence (AI) demand will underpin revenue and earnings growth for Foxconn Industrial Internet Co. Ltd. (Fii). The company's solid technological and operational expertise, coupled with its favorable relationship with key customers (including NVIDIA), will likely help it to win incremental orders as the market continues to expand. We forecast mid-to- high-double-digit revenue growth for Fii's AI-related products in 2024 and 2025; revenue from such products will likely account for over 50% of the company's cloud equipment business in 2025, up from our estimate of 30% in 2023. Cloud accounted for about 41% of Fii's revenues in 2023....

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