Foxconn Industrial Internet (A): Strong vertical capability in Nvidia AI server with dominant share; reiterate Buy

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Foxconn Industrial Internet (A): Strong vertical capability in Nvidia AI server with dominant share; reiterate Buy

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Foxconn Industrial Internet (A)

Strong vertical capability in Nvidia AI

server with dominant share; reiterate Buy

Reiterate Rating: BUY | PO: 87.00 CNY | Price: 70.22 CNY

Reiterate Buy, tweak up PO to CNY87 29 June 2026

We fine-tune our 2026E earnings and lift our 2027E earnings by 6% to reflect Foxconn Equity

Industrial Internet’s (FII) vertical integration efforts. Accordingly, we tweak up our PO to

CNY87 (25x 2H26-1H27E P/E, unchanged) from CNY85. We reiterate our Buy on FII

Key Changesgiven its dominant position in Nvidia platform, as well as its better-than-peers’ vertical

integration capability and product diversification from server to switch. (CNY) Previous Current

Price Obj. 85.00 87.00

2026E EPS 2.88 2.89Solid AI server positioning, resilient margins

We expect FII to retain its leadership on Nvidia platform (40%+). GB300 pull-in should 2027E EPS 3.83 4.05

continue to support revenue expansion; meanwhile, high-ASP Vera Rubin platform should 2028E EPS NA 4.85

see more meaningful contribution from late-3Q26. Despite the impact from higher BOM, 2026E EBITDA (m) 68,976.5 74,153.1

we note FII has been delivering a stronger-than-expected margin, which we attribute to 2027E EBITDA (m) 91,518.9 100,597.4

its rising internal components supply (mechanical parts, PCBs, cables, etc.) by leveraging 2028E EBITDA (m) NA 119,843.1

parentco Hon Hai. As the group as a whole continues to expand into PCBs/cables/

cooling, etc., we expect the company to deliver more resilient margins compared with Robert Cheng >>

Research Analyst

key peers. Beyond AI servers, robust networking switch pull-ins could represent more Merrill Lynch (Taiwan)