Foxconn files for IPO on Shanghai exchange

By Campos Santiago Source:Global Times Published: 2018/5/14 18:08:39

Firm plans to invest 27.2b yuan in projects related to 5G, Internet of Things

Foxconn Industrial Internet Co, an internet and industrial-focused arm of Taiwan manufacturer Hon Hai Precision Industrial Co, filed on Monday an application for an IPO on the Shanghai Stock Exchange to fund projects related to 5G and cloud computing.

According to the published prospectus, Foxconn will issue a maximum of 1.97 billion A-shares. The newly issued shares will amount to 10 percent of the company's enlarged share capital.

The proceedings of the IPO will be used to fund eight investment projects, including cloud computing, 5G and Internet of Things, data centers and intelligent manufacturing. The company plans to invest a total of 27.2 billion yuan ($4.3 billion) in the eight projects.

The pricing for the IPO was not disclosed, but analysts expect Foxconn will be able to raise over 200 billion yuan given its solid profit figures.

"Regional governments have already invested billions of yuan in anticipation of some of Foxconn's projects, such as the factory planned in Chengdu [capital of Southwest China's Sichuan Province]," Jiang Wei, a Beijing-based investor, told the Global Times Monday.

"The government wouldn't invest such amounts of money if they didn't expect Foxconn to come up with at least 20 billion yuan," he said. If Foxconn was able to raise the 27.2 billion yuan it says it requires, that would put the company's total valuation at $43 billion.

Its initial IPO application to the China Securities Regulatory Commission followed a speedy approval process and was approved on March 8, a mere 36 days after the tech company filed for approval in February and a stark contrast to usual IPO applications that often take more than a year.

The speed of the approval is seen as a sign of the Chinese authorities' support for the tech industry in China.

Foxconn is known worldwide as the major contract manufacturer of Apple Inc, including its iPhone line. The company recorded a net profit of 16.2 billion yuan for 2017, up 13 percent from 14.4 billion yuan in 2016.

After the IPO is issued, Hon Hai will own 85 percent of Foxconn Industrial.


blog comments powered by Disqus