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What happened after 36 days of meetings and 84 days of approval slowed down Foxconn's "light speed IPO"?

via:博客园     time:2018/5/14 15:32:09     readed:165

Wen | Xu Qiuyu, Chu Yanyan

Editing | Chen Chen

On May 14, Foxconn Industrial Internet Co., Ltd. (hereinafter referred to as Foxconn Shares) formally disclosed the “Proposal for initial public offering of A shares”, stock issuance arrangement and preliminary inquiry announcement. It is planned to issue approximately 1.97 billion shares, accounting for the total amount after the release. 10% of the share capital. Stock abbreviation “Industrial Rich Alliance & rdquo;, stock code “601138”.

From the submission of the prospectus report to the initial release of the meeting, the Foxconn share has created a new IPO speed for 36 days. However, the late approvals have slowed down its time to market.

The market is widely speculated that the reason why Foxconn shares has not been approved,It is related to its planned amount of RMB 27,253 million.. Excessive raised funds and overvalued valuations have always been considered by the industry as an important reason for the difficulty of rapid issuance.

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“ Big Mac & rdquo; Foxconn

Foxconn disclosed in its prospectus that the company’s volume is very large. There are a total of 60 holding subsidiaries at home and abroad, and the total number of employees is nearly 270,000, most of which are academics with a college degree or below.

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Comparing the performance of A-share listed companies in 2016, Foxconn’s share revenue can be ranked in the top 15. Net profit margins rank in the top 30, and its strength is “crushed” by more than 99% of companies.

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Foxconn’s liabilities and asset-liability ratio nearly doubled in 2017. In this regard, Foxconn shares in the prospectus said that after the completion of this issuance, the company's asset-liability ratio and financial risks will be reduced.

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Foxconn's main business includes three aspects: communication network equipment, cloud service equipment and precision tools and industrial robots.

Among them, the communication network equipment is the main business of Foxconn Industry, with the revenue ratio kept at over 50% and the gross profit rate is about 14%. Precision tools and industrial robots accounted for less than 0.3% of revenue in 2017, but the gross profit rate was as high as 49%.

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Interface news reporters also noted that in 2015 and 2016, revenue in Greater China accounted for more than 35% of total revenue. By 2017, this number is almost “low”.

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Misunderstanding of competition in the industry

Since the disclosure of the prospectus, Foxconn’s horizontal competition has been the most concern to the outside world. The CSRC also asked Foxconn on March 8 to ask whether the two Brazilian companies controlled by Hon Hai and Fu Chikang’s business are engaged in issuance and issuance. People have a competitive relationship.

Currently, Zhongjian Company is the controlling shareholder of Foxconn and directly and indirectly holds 69.1405% of shares in Foxconn. Zhongjian Company is also a wholly-owned subsidiary of Hon Hai Precision (02317.TW). In other words, Hon Hai Precision indirectly holds 69.1405% of shares in Foxconn and is the actual controlling party of Foxconn.

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While holding shares of Foxconn, Hon Hai also indirectly controlled Fu Chi Kang Group (02038.HK, formerly known as Foxconn International) and two companies registered in Brazil. These three companies are considered to have the same industry competition relationship with Foxconn.

In response, Foxconn said that the two Brazilian companies are onlyBrazilThe business does not overlap with the business area of ​​Foxconn, and its business scale is relatively small, and there is no substantial horizontal competition. High-precision metal machine components for mobile phones produced and sold by Fu Chikang and FoxconnFor different brand customers, Hon Hai's Precise Commitment and Facilitate Fu ChikangGradual eliminationThe above-mentioned OEM service for a high-precision metal machine component of a famous American brand mobile phone.

However, Foxconn also acknowledged that Fu Zhikang has provided OEM services for Foxconn and its holding subsidiaries to produce the above-mentioned high-precision metal parts for mobile phones of American-renowned brands. However, Foxconn did not engage in high-precision mobile phones of the brand in its own name. Metal parts production and sales operations.

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Hon Hai’s Transformation Anxiety

All along, "Apple Foundry" is the most shining label on Hon Hai. However, due to factors such as the unsatisfactory sales of various Apple mobile phones and the overall decline in the global smart phone industry, Hon Hai has been seeking transformation in recent years.

On the one hand, Hon Hai plans to work hard in the "smart manufacturing" field. Gou had publicly stated in February this year that he would invest at least NT 10 billion (equivalent to approximately RMB 2.1 billion) in artificial intelligence in five years.

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On the other hand, Hon Hai is also expanding its own business territory through continuous investment in mergers and acquisitions. In addition to Nokia, Sharp and other traditional consumer electronics companies, Hon Hai has also tested several innovative projects such as Didi Trip, Mobike cycling, and virtual currency bank.

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