(Yicai Global) Aug. 11 -- Shares in Foxconn Industrial Internet slumped today despite the Chinese developer of communication network equipment posting double-digit growth in both profit and revenue in the first half as investors cashed in.
The unit of the world’s largest contract electronics maker Hon Hai Precision Industry, better known as Foxconn, [SHA:601138] closed down 2.97 percent today at CNY11.78 (USD1.82).
The disappointing share price belies a very strong performance. Net profit leapt 33 percent in the six months ended June 30 from the same period last year to CNY6.73 billion (USD1.04 billion), according to the Shenzhen-based company’s latest earnings report released yesterday. And revenue jumped 10.97 percent to CNY196 billion (USD30.25 billion).
Most of this came from its telecoms and mobile network device business which, driven by the strong demand for precision structural parts and the surge in growth of fifth-generation mobile networks, brought in CNY112.7 billion, a year-on-year gain of 17 percent. Its cloud computing services raked in CNY82.33 billion (USD12.7 billion), up 3.52 percent. And its industrial internet business, which covers new energy vehicles, mechanical processing and health care, gained 46.69 percent to CNY371 million (USD57.25 million).
Foxconn Industrial’s spending on research and development increased 40.8 percent in the first half from a year earlier to CNY5.23 billion (USD806 million) with the Shenzhen-based company investing more in developing 5G, cloud and edge computing as well as lightweight materials for high-precision structural parts.
However, the report reminded investors that Foxconn Industrial is still facing risks such as high customer concentration, industrial fluctuations and uncertainties related to the Covid-19 pandemic.
Founded in March 2015, Foxconn Industrial is a specialized designer and manufacturer of equipment for telecommunication network construction, high-precision structural parts, cloud-computing devices, high-precision tools and industrial robotics. Its clients include Chinese e-commerce giant Alibaba Group Holding, Internet titan Tencent Holdings, US e-commerce behemoth Amazon, US tech titan Microsoft and computer technology firm Oracle Corporation.
Editor: Kim Taylor