Industrial Fulian Increased Income But Not Profit Last Year And Entered A New Growth Point Of New Energy Vehicle Layout

On the evening of March 29, industrial Fulian released its financial report for 2020, with revenue of 431.786 billion yuan last year, up 5.65% year on year. Among them, the revenue of cloud computing business increased by 7.6% year-on-year to 175.306 billion yuan, accounting for 40.7% of the revenue; the revenue of emerging industrial Internet business increased by 130.85% to 1.44 billion yuan.

During the reporting period, the net profit of industrial Fulian was 17.4 billion yuan, a year-on-year decrease of 6.32%. In this regard, industrial Fulian said that this was due to the one-time epidemic prevention cost caused by the Xinguan epidemic and the year-end exchange rate fluctuations.

It is worth noting that on the basis of the original core business, Fulian disclosed the relevant plans of new energy vehicles in the financial report for the first time. According to the business plan, Fulian will enter the new energy vehicle industry. With the high-end precision manufacturing technology and the model of Lighthouse factory, with the strategic layout of the group in new energy vehicles, as well as the channels of MIH's thousands of domestic and foreign car manufacturers and suppliers, the company has entered into the intelligent manufacturing of core components of new energy vehicles, and entered the Internet of vehicles with the Internet of things and vehicle system, and vigorously explored in the automotive field.

On the one hand, precision manufacturing is originally the foundation and Bank of Fulian and Foxconn behind it. It is logical and practical to start with new energy auto parts. On the other hand, for Foxconn Group, mobile phones, as a pillar industry of the company, can not get rid of in the short term, but it is the reform of the automobile industry that opens up new opportunities. It is still uncertain who will become apple in the automotive industry , and industrial Fulian and Foxconn behind it are betting on cars ahead of time to get ready. An apple industrial chain enterprise executive told 21st century economic report that new energy vehicles are an area that must be entered. The market blue ocean faced by this industry is huge, and we will not miss it.

Limited growth of communication services

From the perspective of the overall business structure and revenue of industrial Fulian, it is mainly divided into three categories: the first is communication and mobile network equipment (including smart phones + smart wearable devices, smart home, network communication + 5g devices, etc.), the second is cloud computing + edge computing, and the third is industrial Internet.

Under the catalysis of the epidemic situation, the housing economy has driven a lot of demand for cloud computing behind it. In 2020, the cloud computing business of Fulian will grow by 7.6% to 175.306 billion yuan. Its products include cloud server, high-performance server, AI server, edge server and cloud storage equipment.

According to industrial Fulian, the main growth momentum of cloud computing business comes from the growth of CSP (cloud service provider) business, and its revenue increased by 70.5% year-on-year, especially the year-on-year growth of 157.6% for China's cloud service providers. At the same time, Fulian will also carry out the product development of new generation x86 and arm based cloud data center servers and memories, expand the investment in edge computing and telecom grade servers, and invest in the development of titanium grade power solutions and advance cooling solutions for data centers, so as to bring new growth momentum through the R & D investment of key components.

However, under the influence of the epidemic situation and trade environment, the growth of communication and mobile network equipment business is limited. According to the financial report, the revenue of communication and mobile network equipment increased slightly by 3.87% last year, of which the smart home business increased by 11.3% year on year. However, the business income of high-precision mechanism parts of communication network equipment was affected by the lag of new products launched by customers, showing a strong growth momentum from the fourth quarter, with a year-on-year growth rate of 50.5% in a single quarter. In 2020, affected by the epidemic situation and trade friction, the orders of telecommunication equipment and enterprise terminal equipment were delayed, and the annual revenue decreased by 6.9% year-on-year, which affected the overall revenue growth of the company.

Next, industrial Fulian will focus on 5g edge and Internet of vehicles applications. At present, the R & D of industrial Fulian in the field of 5g related equipment includes base station router, 400g switch, base station Ru, small base station, mobile router, home router and 5g module, which are used in smart airport, smart factory and smart park. At the same time, industrial Fulian especially strengthened the combination of 5g with industrial Internet and Internet of vehicles, and proposed 5g + edge cloud platform (MEC) + industrial Internet private network scheme and the layout of 5g + Internet of vehicles products.

In terms of industrial Internet business, in addition to the revenue growth from 620 million yuan in 2019 to 1.44 billion yuan in 2020, its gross profit rate will reach 41.67% in 2020, significantly higher than that in 2019. At present, industrial Fulian has launched industrial Internet services in more than 50 important customers, covering industries such as automobile and parts, home decoration, bathroom, tobacco, cement, textile and energy. In the view of industrial Fulian, the next 3-5 years will be the demand explosion period for domestic enterprises in intelligent manufacturing and digital upgrading.

Bet on auto industry

On the basis of the three core businesses, Fulian is also exploring new growth points and selecting new energy vehicle tracks for layout. According to the financial report, industrial Fulian started in two aspects. First, in terms of production and manufacturing, it entered the new field of EV core parts, and applied the materials, tools, equipment technology and unique manufacturing process and process capabilities accumulated in the electronic industry for many years to the new energy electric vehicles, and strive to realize the lightweight and precision of electric vehicles.

Secondly, in terms of market expansion, with the help of the strategic layout of the group in new energy vehicles, as well as the channels of thousands of domestic and foreign vehicle manufacturers and suppliers of MIH, it plans to continue to expand the market scale and influence of vehicle audio-visual multimedia and Internet of vehicles system.

From the group level, Foxconn has been attracted to the automobile industry for a long time, which is also one of Foxconn's transformation directions. In recent years, Foxconn Group has invested in the three emerging industries of "electric vehicle, digital health and robot" and three new technology fields of "artificial intelligence, semiconductor and new generation mobile communication", taking "3 + 3" combination as a long-term development strategy.

Since 2020, Foxconn has been continuously cooperating in the field of new energy vehicles. In addition to the joint venture of Honghua advanced and the establishment of MIH alliance with Taiwan Yulong group in 2020, Foxconn has also established different forms of business cooperation modes with byton and Geely. Subsequently, it will become the new generation factory of Fisker, a new force of American car making, and plans to build Fisker brand electric vehicle products, which are expected to be put into mass production in the fourth quarter of 2023.

It is understood that on March 16, 2021, Foxconn Chairman Liu Yangwei said the company's Wisconsin plant may now be used to produce electric vehicles. Liu also said Foxconn would invest about NT $10 billion (about $354 million) a year in new businesses, including electric vehicles, over the next three years.

As the leader of the group's transformation, Fulian will accelerate the layout of new energy vehicles under the overall strategy, and the development of electric vehicles is closely related to precision devices, 5g communication equipment, cloud computing, industrial Internet and other businesses.

On the other hand, the market of new energy vehicles and intelligent vehicles is huge. China's new energy vehicles are expected to sell 1.8 million new energy vehicles in 2021, up 40% year-on-year, according to CAAC. Previously, Liu Yangwei said that the global electric vehicle market is expected to reach 36 million vehicles per year in 2025-2030, while Foxconn will take 10% of the global market share in 2025-2027.

At the industrial level, from mobile phones to automobiles, is a new direction for many manufacturing enterprises. A software industry personage analyzed to the 21st century economic reporter: "now everyone is discussing whether the car will become the next generation of new mobile phone level industrial products. If we only compare the mobile phone hardware with the whole car installation, the mobile phone industry is not of the same order of magnitude as the automobile industry, but if the industrial scale of the Internet software industry is included, the volume needs to be different. Apple, Google and Microsoft are not parasitic on the automobile industry, but seize the industrial revolution in the information age, with mobile phones and computers as carriers. If the future of the car into the software industry, the car will become a carrier of information, not just a means of transportation, it may enter the next industrial revolution. And Foxconn configures part of the car capacity, waiting for apple in the next automobile field, to take advantage of the situation, which is also a good choice at present. "

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