(Yicai Global) March 17 -- Shares of Foxconn Industrial Internet surged by the exchange-imposed trading limit after its chief executive said the supplier of communication network equipment will continue to pay high dividends.

Foxconn Industrial [SHA: 601138] closed 10 percent up at CNY13.59 (USD1.97) today, the highest closing price since May 6, 2021.

Generous dividends are based on the company’s promising future, Brand Cheng, who is also the vice president of the Shanghai-listed unit of Apple supplier Hon Hai Precision Industry, better known as Foxconn, said at a press conference yesterday.

The Shenzhen-based firm, which also makes cloud service equipment, precision tools, and industrial robots, will maintain a certain percentage of dividends as long as it can continue to improve its gross margin and increase profitability, Cheng added.

Foxconn Industrial announced on March 14 that it would return over 54 percent of last year’s net profit to investors, paying out a record CNY5.50 (80 US cents) for every 10 shares they hold. That was a 10.4 percent increase on 2021.

Net profit at Foxconn Industrial rose 0.3 percent to CNY20.1 billion (USD2.92 billion) in 2022, versus a 14.8 percent gain the year before, according to its financial statement released on March 14. Revenue was CNY511.9 billion (USD74.6 billion) last year, up 16.4 percent.

Gross profit margin fell 1.1 percentage point to 7.3 percent last year, per the earnings report. Foxconn Industrial’s chief financial officer said in a press release yesterday that the drop was mainly the result of a change in product mix and higher costs due to the Covid-19 outbreak at its Zhengzhou plant in China last year.

To generate more profit, Foxconn Industrial will keep improving its gross margin rate through technology research and development, focusing on enhancing the growth of its cloud computing business to gradually replace the original equipment manufacturer model, Cheng noted.

Editors: Dou Shicong, Futura Costaglione