In-Depth Analysis of the Impact of Large-Scale Dividend Distribution by Foxconn Industrial Internet (601138)

Item	Value
Dividend Plan	RMB 3.30 per 10 shares (tax included)
Total Dividend Amount	RMB 6.551 billion
Base Share Capital	19.849 billion shares (after share repurchase deduction)
Record Date	January 15, 2026
Dividend Payout Ratio	54.08% of interim net profit

This is the

launched by Foxconn Industrial Internet since its listing in 2018, demonstrating the company’s ability and willingness to continuously enhance shareholder returns [1].

---

• In the first half of 2025, the company achieved a net profit of
  RMB 12.11 billion
  , a year-on-year increase of 38.6%, hitting a new historical high for the same period [1]
• The company’s net profit in the first three quarters of 2025 reached
  RMB 22.49 billion
  , a year-on-year increase of 48.5% [2]
• The company’s financial health is sound:
  • Current Ratio:
    1.44
    (good liquidity)
  • Quick Ratio: 0.85
  • Return on Equity (ROE):
    19.62%

• Short-term cash flow will decrease by approximately
  RMB 6.55 billion
• According to Cinda Securities’ research report, the company’s operating cash flow in the first three quarters of 2025 was -RMB 1.021 billion [2]
• Need to balance dividend distribution and capital expenditure needs

---

Item	Amount/Purpose
2025 Estimated Capital Expenditure	Approx. RMB 9.3 billion
Main Investment Direction	AI server capacity expansion, global capacity layout
R&D Investment	Continuous focus on core areas such as AI infrastructure

• The company has established a
  multi-regional collaborative delivery system
  globally, and will expand production based on customer demand in the future [4]
• The 8 major global cloud service providers are expected to have capital expenditures of
  over USD 520 billion
  in 2026 (year-on-year +24%) [2]
• Demand for AI computing power remains strong, and is expected to further grow to
  over USD 600 billion
  in 2026 (year-on-year +40%) [4]
• The company’s net profit is expected to reach
  RMB 36.1 billion / RMB 68.0 billion / RMB 85.9 billion
  in 2025-2027 respectively [2]

: This dividend distribution will not have a material impact on the company’s core investment and expansion plans, and the company still has sufficient funds to support its business development.

---

Indicator	Value	Explanation
Static Dividend Yield	0.54%	Calculated based on the current share price of RMB 61.33
Historical Dividend Yield (August 2025)	1.33%	When the share price was lower [3]
Dividend Amount	Historical High	First interim dividend distribution

Company/Indicator	Dividend Yield
Foxconn Industrial Internet	0.54%
Luxshare Precision	2.29%
Goertek	2.63%
Industry Average	1.44%

Foxconn Industrial Internet’s current dividend yield is at the

, but the static dividend yield has passively decreased due to the rise in share price [3].

Indicator	Current Value	2026E	2027E
P/E (x)	39.86	21.02	16.64
P/B (x)	7.54	4.8	3.8

1. Core Driver is Not High Dividend Yield
   : The current dividend yield of 0.54% is relatively low, making it difficult to serve as the main support for valuation recovery

2. Valuation Recovery Driven by High Performance Growth
   :
   • Revenue from the AI server business in the first three quarters increased by
     over 300% year-on-year
     [2]
   • The cloud computing business accounts for
     60%
     of total revenue [1]
   • Net profit in Q3 alone
     exceeded RMB 10 billion
     (year-on-year +62%) [2]

3. Valuation Recovery Path
   : The P/E ratio is expected to gradually drop from the current
   40x to 17x in 2027
   , mainly driven by profit growth

4. Signal of Continuous Enhancement of Shareholder Returns
   :
   • Cumulative dividends since listing have exceeded
     RMB 56.5 billion
     , with annual dividends exceeding RMB 10 billion for three consecutive years [1]
   • First launch of interim dividend distribution, increasing dividend frequency
   • Company statement:
     The intensity of cash returns is expected to steadily increase
     [4]

---

• ✓ Short-term cash flow will decrease by approximately RMB 6.5 billion, but the company has
  sufficient payment capacity
• ✓ Dividend accounts for 54% of net profit, which is at a
  reasonable and healthy level
• ✓ Will not affect the company’s core
  investment and expansion plans

• ✓
  High performance growth is the core driver of valuation recovery
• ✓ High dividend yield (current 0.54%)
  is not the main support for valuation recovery
• ✓ Valuation recovery is expected to be achieved through
  profit growth driving
  (P/E from 40x to 17x)

• ⚠ Risk of short-term sharp fluctuations in share price
• ⚠ Risk of AI capital expenditure falling short of expectations
• ⚠ Risk of intensified industry competition

---

[1] Foxconn Industrial Internet Official Website - Trillion-Yuan Leader Joins Interim Dividend Camp

[2] Cinda Securities - Foxconn Industrial Internet 2025 Q3 Earnings Report Review

[3] Gilin AI - Analysis of Foxconn Industrial Internet’s Dividend Yield

[4] China Fund Journal - Foxconn Industrial Internet Responds to Rumors and Communicates with Investors

[5] 10jqka (Flush) - Foxconn Industrial Internet Earnings Forecast