(Yicai Global) March 31 -- Foxconn Industrial Internet's shares rose after the unit of Hon Hai Precision Industry, the world's largest contract electronics maker and a major Apple supplier, reported a 10 percent profit increase for last year and said production is back to where it was before the novel coronavirus epidemic broke out.

The firm's stock price [SHA:601138] closed 3 percent higher today at CNY13.21 (USD1.86), giving the communications network equipment maker a market capitalization of CNY262.3 billion (USD36.9 billion). The benchmark Shanghai Composite Index was little changed.

Net profit came in at CNY18.6 billion (USD2.6 billion) in the year ended Dec. 31, the Shenzhen-based company said in its earnings report released yesterday. Revenue fell 1.6 percent to CNY408.7 billion (USD57.6 billion).

Production capacity is back to normal levels, Chairman Li Junqi said at the firm's annual earnings press conference today, adding that the outlook for the third and fourth quarters looks good.

The epidemic prompted a surge in remote working which has led to strong demand for data centers and servers. Many customers are also expected to complete their reconfiguration to fifth-generation mobile network capabilities this year, which will see Foxconn Industrial's 5G products commercialize on a large scale.

Prevention and control of the Covid-19 pandemic was the focus of the first quarter, Li said. Foxconn Industrial started to produce its own masks at the beginning of last month and so far has made more than 20 million to satisfy both its own demand and that of major upstream and downstream clients.

Income from the firm's mobile network equipment and technological services business jumped 20.4 percent to CNY624 billion (USD87.9 billion) in 2019, while earnings from its cloud-computing services rose 6.3 percent to CNY162.9 billion (USD23 billion). Its telecoms business income drop 5.6 percent to CNY244.6 billion.

Operating costs fell 1.33 percent to CNY374.5 billion due to better internal controls and lower spending on sales and management which dropped by 3.3 percent and 19.1 percent, respectively. Investment in research and development was up 4.8 percent to CNY9.4 billion, and the proportion of staff working in its R&D department rose to 11.4 percent from 9.2 percent.

Editors: Dou Shicong, Kim Taylor