投资要点/Investment Thesis

事件：公司发布2022年年度报告，全年实现营收5,118.50亿元，yoy+16.45%，实现归母净利润200.73亿元，yoy+0.32%，实现扣非归母净利润184.10亿元，yoy-0.90%。公司2022年度合计拟派发现金红利109.22亿元（含税），占归母净利润54.41%。

2022 results takeaways: revenue up 16%, flat profit; RMB11bn dividend payouts

Key metrics: Foxconn Industrial Internet (Fii) published 2022 results with revenue at RMB511.85bn, up 16.45% yoy; net profit came in flat at RMB20.07bn, up 0.32% yoy, while ex-nonrecurring net profit amounted to RMB18.41bn, down 0.90% yoy. Fii plans to distribute RMB10.92bn in cash dividends for 2022 (including tax), 54.41% of net profit.

点评：收入创历史新高，净利润和21年基本持平主要受郑州疫情拖累，22年经营活动现金流进一步优化，分红比例进一步提升。2022年公司营业收入自上市以来首次突破5000亿人民币，实现营收5,118.50亿元，创历史新高，yoy+16.45%，实现归母净利润200.73亿元，yoy+0.32%，实现扣非归母净利润184.10亿元，yoy-0.90%。从业务板块来看，云计算/通信及移动网络设备/工业互联网分别实现营收2,124.44亿元/2,961.78亿元/19.12亿元，yoy+19.56%/+14.37%/+13.45%，占整体营收的比重为41.51%/57.86%/0.37%，毛利率分别为3.96%/9.25%/47.87%，yoy-0.18pct/-1.58pct/+4.00pct。22年经营活动产生的现金流量净额为153.66亿，yoy+76.1%，现金流质量改善明显。公司2022年度合计拟派发现金红利109.22亿元（含税），占归母净利润54.41%，低估值+高分红投资价值显著。

Record revenue: 2022 revenue set a new high at RMB511.85bn, up 16.45% yoy, exceeding RMB500bn for the first time since listing; net profit grew just 0.32% yoy to RMB20.073bn, dragged by the pandemic impact in Zhengzhou. Ex-nonrecurring net profit was RMB18.41bn, down 0.90% yoy. Fii was able to optimize operating cash flow and increase its dividend ratio.

Divisional breakdown: the cloud computing/ communications and mobile network equipment/ industrial internet divisions drew revenues of RMB212.44bn/296.18bn/ 1.91bn, up 19.56/14.37/13.45% yoy, accounting for 41.51/57.86/0.37% of total revenue. Their corresponding gross margins were 3.96/9.25/47.87%, changing -0.18ppt/ -1.58ppt/ +4.00ppt yoy. Net cash flow from operating activities in 2022 amounted to RMB15.37bn, up 76.1% yoy, with much better cash flow quality. Fii plans to distribute RMB10.92bn in cash dividends for 2022 (tax included), accounting for 54.41% of net profit. We believe Fii offers good investment value with its low valuation and high dividend payout ratio. 

重点看好数字经济时期+AI驱动的算力建设时代公司三大业务的增长弹性，中长期看，公司“端、网、云+工业互联网”主营业务长期积累优势显著，“智能制造 + 工业互联网”核心竞争力持续强化，同时围绕“大数据 + 机器人”进一步拓宽业务版图，业务经营+战略布局双轮驱动，有望在AI算力新时代人工智能+智能制造黄金赛道抢占优势地位，开启新一轮高成长周期。

3 core businesses: edge computing; networks; cloud and industrial internet

Our key focus for Fii in the medium to long term is the growth elasticity of its three major businesses in the digital economy amid an AI-driven computing power buildout. We see medium to long-term advantages in view of its tri-core business buildout in edge computing, networks, and cloud and industrial internet. We expect it will continue to hone its competitive edge in smart manufacturing and industrial internet, while expanding its big data and robotics business footprint. We believe its strategic push into operations and business development will drive increasing dominance of the lucrative AI and smart manufacturing markets. We anticipate its gradual ramp-up to a new high-growth cycle.

云计算业务：1）行业层面—服务器市场扩容持续：看好数字经济+以Chatgpt为代表的AI驱动的算力建设需求带动的服务器市场扩容；2）云服务业务：持续受益于服务器白牌化+公司份额领先（云计算服务器出货量持续全球第一，主要客户涵盖北美前三大CSP服务商+国内头部CSP服务商及互联网应用服务企业）+一条龙服务优势明显（产品设计、技术开发、关键零组件、系统组建、运筹管理到弹性调配交付），云服务占比进一步提升，22年云服务商产品在云计算收入中占比快速提升，22年超40%；3）AI服务器业务：持续受益于ChatGPT等新兴AI产品对算力、带宽、GPU、高容量储存、先进散热与节能需求激增+绑定行业头部客户（多年来一直是数家第一梯队云服务商AI服务器（加速器）与AI存储器供应商）+产品持续迭代具备技术领先性（相关AI服务器、AI存储器产品持续迭代已开发至第四代），22年AI服务器及HPC出货增长迅速，在云服务商产品中占比增至约20%；4）产品和技术创新：持续研发创新技术突破，有望持续强化优势地位+提升份额，模块化方面，2022年10月，公司推出全球第一台DC_MHS服务器，公司新一代液冷技术也应用在客户最新HPC加速器中。

1.Cloud computing

Industrial servers: we are bullish about the rise of the digital economy and expanding server market, propelled by ChatGPT and AI-driven computing buildout demand.

Cloud service solutions: Fii benefits from the white-label server business as the market leader (the world’s highest cloud computing server shipments with key customers that include the top three North American CSP service providers and leading Chinese CSP service providers and internet application service companies). Its clear advantage is a one-stop shop (product design, technology development, key components, system formation, operational management and flexible provision delivery). Its cloud service solutions are growing fast, accounting for over 40% of cloud computing revenue in 2022.

AI servers: Fii’s AI server and HPC shipments grew rapidly in 2022, with cloud service provider products accounting for about 20% of cloud computing revenue. Business has grown as ChatGPT and other emerging AI products escalated demand for computing power, bandwidth, GPUs, high-capacity storage, and advanced cooling and energy-efficient products. Fii’s years of deep ties with industry-leading customers (first-tier cloud service providers to whom it supplies AI server (accelerators) and AI memory products help maintain its tech leadership on continuous product iteration (it has developed AI server and AI memory products up to the fourth generation).

Product and tech innovations: Fii launched the world’s first data center-modular hardware system (DC-MHS) server in October 2022. And its new-generation liquid cooling technology is featured in customers’ latest HPC accelerators. As the company continues to make R&D technological innovation breakthroughs, we expect its dominant position will strengthen and lead to market share expansion.

网络通信业务：1）行业层面—网络扩容需求持续：全球企业数字化、5G基建和智能家居需求提升，工业互联网、元宇宙、AIGC等增量需求增长，上层流量持续增加带动网络扩容需求；2）5G设备：持续受益于5G建设持续推进应用场景丰富，22年5G设备营收增长超20%，3）网络设备：持续受益于企业数字化基础设施建设升级和云端应用快速增长+企业网络设备拥有占全球市场份额超50%以上的领先客户群体，22年网络通信设备营收增长超20%；4）无线设备：拥有5G和Wi-Fi6/6E核心技术，目前正深化企业Wi-Fi 7产品布局；5）结构件业务：23年iPhone 新机Pro机型有望升级至钛铝复合压铸中框，ASP提升有望贡献业绩增量；6）产品和技术创新：持续关注下一代通讯及网路技术如WiFi 7企业网络等技术。

2.Network communications

•Industry networks: network buildout demand is rising with growing demand for global enterprise digitalization, 5G infrastructure and smart homes. Incremental industrial internet, metaverse and AIGC demand fuels upper-layer network traffic.

•5G equipment: 5G equipment revenue increased by more than 20% in 2022 as the 5G buildout continued to enrich application scenarios.

•Network equipment: enterprise digital infrastructural buildout upgrades and cloud applications continue to drive the business. Enterprise network equipment customers account for more than 50% of global leading customers. Network communication equipment revenue increased more than 20% in 2022.

•Wireless equipment: from 5G and WiFi 6/6E core technologies, the company is advancing to enterprise WiFi 7 product development.

•Structural parts: the new iPhone Pro model in 2023E could feature an upgrade to a titanium-aluminum composite die-cast middle frame, which would raise ASP and contribute to performance improvement.

•Product and technology innovations: our eyes are on next-generation communication technologies such as WiFi 7 enterprise networks.

工业互联网业务：公司为工业互联网行业标杆企业，连续四年入选工信部的“双跨平台”，并入选工信部“2022年度智能制造优秀场景”，赋能十大行业1,500多家企业。成功打造世界首座精密金属加工“灯塔工厂”，通过5T融合，实现新产品导入速度加快29%、量产爬坡速度提升50%等智能化生产。22年公司工业互联网平台（灯塔工厂/标准软件/Fii Cloud）业务三大核心板块均实现快速增长：卓越制造咨询与灯塔工厂解决方案业务，收入增长113%，客户增长60%；一站式数字制造运营业务收入增长283%，客户增长63%；云与平台服务业务收入增长140%，资源规模增长53%。持续看好工业互联网改造逐步进入兑现期，项目开拓+产品输出，未来有望向多行业渗透，成长空间较大。

3.Industrial internet

•Global acclaim: an industrial internet benchmark corporation, Fii has been on the Ministry of Industry and Information Technology’s (MIIT) annual merit list of cross-industry and cross-sector industrial internet platforms for four straight years. MIIT also acknowledges Fii among outstanding smart manufacturers that have empowered more than 1,500 enterprises in 10 industries. Its Guanlan campus is the first lighthouse factory to focus on precision metal processing. Through 5T integration, it realized smart production processes that lead to 29% faster new product launches and 50% faster mass production. 

•Fast growth: all the three core areas of its industrial internet platform business – lighthouse factories/standard software/Fii Cloud – grew quickly in 2022:

- manufacturing consulting and lighthouse factory solutions: revenue rose 113% and the number of customers increased 60%;

-one-stop digital manufacturing operations: revenue rose 283% and the number of customers increased 63%;

-cloud and platform services: revenue rose 140% and the scale of resources increased 53%. 

We remain bullish about the industrial internet restructure business as project development and product output gradually move toward the cash-in phase. We see large headroom for future growth as Fii continues to penetrate multiple industries.

战略布局：22年围绕主营业务在在智能制造+工业互联网、大数据+机器人等创新业务核心赛道“2+2”领域积极布局，与上下游、业务生态圈里的龙头深化合作，在人工智能、智能制造等领域重点发力。1）智能制造：公司投资的工业视觉龙头企业凌云光于22年上市，精密机加工龙头企业新大陆精密已提交ipo主板申请；2）机器人：持续投资全球协作机器人独角兽思灵机器人；3）工业互联网：投资大陆领先射频技术公司开元通信。

Twin market strategic investments

Revolving around its main businesses, Fii made strategic investments in 2022 into the following companies to build out into innovative twin markets such as smart manufacturing with industrial internet, and big data with robotics:

•Smart manufacturing: leading machine vision company Luster LightTech went public in 2022, while Newland Precision, a leading precision machining company, has applied for IPO on the main board.

•Robotics: Siling Robot Technology is a globally collaborative robot unicorn.

•Industrial internet: Kaiyuan Communications is a leading radio frequency technology company in China.

投资建议/Investment Ideas