Produced by | Bullet Finance

Art Design | Qianqian

Reviewed by | Songwen

Against the backdrop of the continued boom in AI applications, the shipment volume of AI servers has been on the rise, and Industrial Richlink, a global leader in AI servers, has fully benefited from this trend. The company's revenue and profits have both soared to record highs.

Due to the significant performance growth and investors' favor towards the computing power industry, Industrial Richlink's stock price has surged by over 205% year-to-date in 2025, with the company's market value approaching 1.3 trillion yuan. Tempted by the soaring stock price, shareholders of Industrial Richlink have started to reduce their holdings and cash out, including the employee stock ownership plan of Foxconn.

Given the sustained strong downstream demand, Industrial Richlink is accelerating its inventory buildup, with its inventory scale exceeding 160 billion yuan. To raise funds, Industrial Richlink has not only increased its external borrowing but also expanded its use of funds from suppliers.

As a global leader in AI servers, how far can Industrial Richlink go by riding the wave of AI?

1. AI Server Revenue Surges Over 300%, Profits Hit Record High

Despite its outstanding performance, Industrial Richlink only disclosed its third-quarter report on the second-to-last day before the deadline.

On October 30, Industrial Richlink's third-quarter report showed that in the first three quarters of 2025, the company achieved operating revenue of 603.931 billion yuan, a year-on-year increase of 38.4%, and realized net profit attributable to shareholders of 22.487 billion yuan, a year-on-year increase of 48.52%.

In the third quarter alone, Industrial Richlink realized net profit attributable to shareholders of 10.373 billion yuan, a year-on-year increase of 62.04%.

The significant performance growth of Industrial Richlink is directly related to the booming AI industry.

From a revenue perspective, Industrial Richlink's revenue is mainly composed of cloud computing and communication and mobile network equipment. In 2024, the company's revenue from cloud computing and communication and mobile network equipment was 319.4 billion yuan and 287.9 billion yuan, respectively, accounting for 52.43% and 47.26% of the company's total revenue.

According to its official website, Industrial Richlink's cloud computing business mainly includes high-performance servers, storage devices, and other products, while its communication and mobile network equipment include 5G/4G modules, 5G terminal products, and more.

Over the past few years, due to the booming demand for AI, the market demand for high-performance servers has surged. As an absolute leader in the global AI server field, Industrial Richlink has a market share of over 40% in the AI server sector through its deep partnership with NVIDIA.

Due to the extremely strong downstream demand, the sales volume of Industrial Richlink's AI servers has rapidly increased. Industrial Richlink's third-quarter report showed that in the first three quarters of 2025, the revenue from its GPU AI servers increased by over 300% year-on-year, with a quarter-on-quarter increase of over 90% and a year-on-year increase of over five times in the third quarter alone.

Driven by this, Industrial Richlink's cloud computing revenue has soared. In the first three quarters of 2025, the revenue from its cloud computing business increased by over 65% year-on-year, with a year-on-year increase of over 75% in the third quarter alone.

In addition, as the scale of AI large model training continues to expand, the market demand for the bandwidth and transmission efficiency of computing power infrastructure has continued to rise. Driven by this, the market demand for high-performance switches has continued to increase. In the third quarter of 2025, Industrial Richlink's switch business saw a year-on-year increase of 100% in the quarter, with the 800G switch business seeing a year-on-year increase of over 27 times in the quarter.

Benefiting from its strong manufacturing capabilities and deep partnership with NVIDIA, Industrial Richlink has also undertaken the full-chain manufacturing tasks for NVIDIA, from GPU modules to complete machine production.

Currently, the yield rate of Industrial Richlink's contract manufacturing for NVIDIA's key project, the GB200, has been continuously improving. According to a research report published by Goldman Sachs, Industrial Richlink is the main contract manufacturer for NVIDIA's GB300 servers, accounting for 40% of the cabinet contract manufacturing market share.

It is foreseeable that, given the sustained strong AI demand and deep partnership with NVIDIA, Industrial Richlink's performance is likely to further climb in the coming period. However, whether it can achieve such rapid growth to a large extent depends on whether AI demand can continue to rise and whether the company can maintain its deep partnership with NVIDIA.

In this regard, Bullet Finance attempted to contact Industrial Richlink to inquire about the current yield rate of its GB200 contract manufacturing and whether NVIDIA has further increased its orders. As of press time, no response has been received from Industrial Richlink.

2. Accounts Payable and Notes Payable Reach 154.5 Billion Yuan, Raising Funds from Multiple Sources to Increase Inventory Buildup

Due to the continuous increase in product shipments, Industrial Richlink has also accelerated its inventory buildup.

As of September 30, 2025, Industrial Richlink's inventory balance was 164.7 billion yuan, an increase of over 40 billion yuan from 122.9 billion yuan as of June 30, 2025, also hitting a record high for the same period.

To raise funds for inventory buildup, Industrial Richlink has raised funds through multiple channels, such as increasing borrowing, increasing the use of supplier funds, and strengthening accounts receivable recovery.

Data shows that as of September 30, 2025, Industrial Richlink's short-term borrowing was as high as 85.84 billion yuan, an increase of over 24.6 billion yuan from 61.18 billion yuan as of June 30, 2025.

It is worth noting that most of the company's interest-bearing borrowings are short-term borrowings, while the company's long-term borrowings are only a few million yuan for the same period. Since short-term borrowing rates are usually lower than long-term borrowing rates, Industrial Richlink's focus on short-term borrowings will also reduce the company's interest expenses.

In addition, Industrial Richlink is also increasing its use of supplier funds. As of September 30, 2025, Industrial Richlink's accounts payable and notes payable balance was as high as 154.5 billion yuan, an increase of 31.7 billion yuan from 122.8 billion yuan as of June 30.

Due to its large operating scale, the company's suppliers include large listed enterprises such as Shenghong Technology and Huadian Co., Ltd., as well as numerous unlisted small and medium-sized enterprises.

For large enterprises like Huadian Co., Ltd., having a portion of their funds occupied by customers will not affect their daily operations. For small enterprises, however, once a significant amount of funds is occupied by customers for an extended period, it will have an adverse impact on their daily operations.

To address the issue of large enterprises delaying payments to supply chain enterprises, on March 17, 2025, the State Council issued Decree No. 802, the Regulations on Ensuring Payments to Small and Medium-sized Enterprises, which took effect on June 1. The regulations stipulate that large enterprises purchasing goods, engineering, and services from small and medium-sized enterprises should make payments within 60 days from the date of delivery. The regulations officially took effect on June 1.

In addition to increasing the occupation of supplier funds, Industrial Richlink is also actively recovering accounts receivable. As of September 30, 2025, Industrial Richlink's accounts receivable and notes receivable balance was 85.78 billion yuan, a decrease of over 12 billion yuan from 97.8 billion yuan as of June 30.

Against the backdrop of increased accounts receivable recovery, Industrial Richlink's accounts receivable turnover days decreased from 47.98 days in the first half of 2025 to 40.30 days in the third quarter, indicating a significant increase in the speed of accounts receivable recovery.

Under the influence of raising funds through various means and increasing inventory buildup, Industrial Richlink's asset-liability ratio has increased, and its inventory turnover days have also risen.

From Industrial Richlink's actions, it is clear that to seize this wave of AI enthusiasm, it is mobilizing all resources to fully benefit from AI. However, how to balance the relationship between inventory and liabilities is also a key issue that the company needs to consider.

In this regard, Bullet Finance attempted to contact Industrial Richlink to inquire about the further expansion of its occupation of supplier funds as of September 30, the average payment period for accounts payable, and whether it meets the State Council's requirement of paying small and medium-sized enterprise suppliers within 60 days.

In the third quarter of 2025, the company significantly accelerated its inventory buildup. What aspects of inventory purchases has it mainly increased? Can the company's intended orders fully digest the inventory? As of press time, no response has been received from Industrial Richlink.

3. 12,000 Employees' Stock Ownership Plan Floats Profits of 6 Billion Yuan, Starts to Reduce Holdings After Significant Gains

Due to the significant performance growth and investors' pursuit of computing power enterprises, Industrial Richlink has performed extremely well in the capital market. Since its low point on April 9, the company's stock price has surged by over 350%, with its market value approaching 1.3 trillion yuan.

The significant rise in the company's stock price has also fully benefited its core employees. In June 2022, Industrial Richlink implemented an employee stock ownership plan to incentivize employees to create value. The shares for the employee stock ownership plan were obtained through secondary market repurchases by the company, and subsequently, Industrial Richlink repurchased 126 million shares in the secondary market with its own funds.

On June 14, 2023, Industrial Richlink transferred these shares to the employee stock ownership plan account at a transfer price of 10.816 yuan per share.

According to the information disclosed in the draft of Industrial Richlink's employee plan, the number of participants in this employee stock ownership plan does not exceed 12,000. Director Li Junqi and seven other senior management personnel received 5.75% of the shares in this employee stock ownership plan, while no more than 11,992 other personnel received 74.25%, with the company also reserving 20% of the shares.

This employee stock ownership plan is unlocked in four phases, with relatively loose unlocking conditions, requiring annual net profit from 2022 to 2025 to be no less than the average level of the previous three fiscal years.

Based on the timeline, the first and second unlocking periods have now been unlocked. The first unlocking period unlocked 23.75 million shares, while the second unlocking period unlocked 46.6239 million shares. Given the profits for the first three quarters of 2024 and 2025, it is highly likely that all shares in Industrial Richlink's employee stock ownership plan will be unlocked.

After the successful completion of the first unlocking period, the Foxconn employee stock ownership plan began to reduce its holdings of company shares. From September 2024 to April 2025, this employee stock ownership plan cumulatively reduced its holdings by several million shares. At that time, due to the relatively low stock price, the profits from this employee stock ownership plan were not significant.

After the completion of the second unlocking period, this employee stock ownership plan continued to reduce its holdings of company shares. On April 23, 2025, this employee stock ownership plan still held 117.6 million shares, making it the company's 10th largest shareholder.

As of September 30, 2025, this employee stock ownership plan has exited the list of the top 10 shareholders, with the company's 10th largest shareholder holding 103 million shares at the same time. This means that from April 23 to September 30, this employee stock ownership plan reduced its holdings of Industrial Richlink by at least 14 million shares.

Based on Industrial Richlink's current stock price, along with the profits from dividends received during the holding period, the conservative estimate for the paper gains of Industrial Richlink's employee stock ownership plan for 12,000 people is over 5 billion yuan.

In this regard, Bullet Finance attempted to contact Industrial Richlink to inquire about the current number of shares held by the employee stock ownership plan, the number of shares reduced since its inception, and whether the company needs to make announcements when the employee stock ownership plan reduces its holdings. Does the employee stock ownership plan believe that the company's stock price is overvalued when selling company shares? As of press time, no response has been received from Industrial Richlink.

For Industrial Richlink, being in a high-growth sector and having a deep partnership with NVIDIA, the world's largest technology enterprise, the company still has the potential for sustained performance growth in the coming period.

To seize the opportunities brought by AI, the company is also mobilizing resources and accelerating its inventory buildup. Benefiting from its sustained performance breakout, Industrial Richlink's market value has also approached 1.3 trillion yuan. In the future, whether the company can maintain this market value largely depends on how far it can go in the AI computing power sector.

*The accompanying images are from Shutterstock, based on the VRF protocol.