On the night of May 11, the Securities Regulatory Commission released this week’s new share approval. Only Foxconn obtained the IPO 'Admission Ticket.' Even more surprising was that the fundraising quota was not released in accordance with the usual practice. At this time, friends who had brushed the information were aware of it. Time, yes, it is 23: 48.
The China Securities Regulatory Commission stated that on May 11th, the China Securities Regulatory Commission approved the initial application of Foxconn Industrial Internet Co., Ltd. in accordance with legal procedures. Foxconn and its underwriters will negotiate with the Shanghai Stock Exchange to determine the issuance schedule and publish a prospectus document.
Late night approval
According to the usual practice, the SFC will issue new share approval documents every Friday. The time is mostly concentrated between 8:00 and 9:00 pm. However, yesterday's approval was even more unexpected.
23: 48. The long-awaited approval document finally came to an end. The name Foxconn was exposed on the surface. Surprisingly, the CSRC's information did not mention Foxconn's fundraising amount. This was the reason since the IPO was restarted. There are no more cases than they are.
According to the Foxconn prospectus, the IPO will be used to raise funds of 27.253 billion yuan. Some brokerages expect Foxconn to issue 1.96353 billion IPOs this time. The estimated issuance price is around 13.84 yuan, and the corresponding issuance price-earnings ratio is 17.18 times. Based on this estimate, Foxconn estimates. The value is 273.1 billion yuan.
Why will the rush be 'late?'
February 1 reported the prospectus submission.
The manuscript report and feedback were disclosed on February 9th.
February 22 prospectus disclosure update.
March 8 passed the trial.
The pre-disclosure of the prospectus only updated the link. Companies that had queued up for the listing took half a year. Foxconn took two weeks to finish, and on March 8th, it passed the censorship. It took only 36 days from the filing date. , broke the record of the previous meeting, this speed is really waiting innumerable queuing companies waiting outside the big A silent company.
However, after receiving the approval, Foxconn did not continue the myth of 'lightning distribution'. The “late” approval rhythm allowed Foxconn to report and receive approvals from the new stock for 100 days. Before that, he wanted to create medicines for 'Alibaba'. Mingkang (41.390, 3.76, 9.99%) took the lead in obtaining the IPO approval, and the time of listing was earlier than the two unicorns of Foxconn and Ningde in the past.
Many market participants speculated that the reason why Foxconn has been unable to obtain approvals is related to its amount of 27.253 billion yuan in the amount of funds to be raised. Excessively raised valuations have been considered by the industry as an important reason for the difficulty of rapid issuance. The reason why Kant took the lead in obtaining the IPO approval was to a large extent the listing of its 'discount', that is, the scale of the raised funds has shrunk dramatically.
On April 16, the “Preliminary Inquiries and Promotions for Initial Public Offerings” disclosed by WuXi PharmaTech on the website of the Shanghai Stock Exchange showed that the number of IPOs issued was no more than 104 million shares, and the estimated amount of funds used was 2.13 billion yuan, which was higher than the company’s previous The pre-disclosed 5.741 billion yuan was reduced by 63%, and the planned investment projects were also reduced from 10 to 4.
The size of the fund is expected to shrink
After the release of WuXi PharmaTech's 'Shrinking', Foxconn has not received any approval, and the approval does not specify the amount of funds raised... All indications indicate that the scale of Foxconn fund-raising will be a high-probability event. Regulators will be in the new economic IPO and market. To seek the maximum balance between stability, it is impossible to allow a large number of 'Big Mac' Airborne A-shares.
From 2018 to the present, the average size of a single new share fund raising was approximately 1.09 billion yuan. On February 5 of this year, the company invested 4.967 billion yuan in Huaxi Securities (12.550, -0.29, -2.26%), becoming a new stock-raising since 2017. The highest point of the amount of money. It can be seen, the regulator is very cautious about the size of the new stock fundraising. It is very difficult to get a green light on the listing of Big Mac when the market is unstable.
According to the issuance review process, after the issuance of the review committee meeting, it is necessary to perform certain post-meeting matters to obtain the approval. Foxconn wants a smooth listing and it is more feasible to reduce the amount of funds raised, and to issue additional bonds or issue bonds later. Fatty, I'm afraid it's harder to solve the raised funds in one step.
However, everything is undecided. In the end, the amount of fundraising needs to wait for Foxconn to officially publish the IPO documents. Generally speaking, under the current market conditions, issuers are more willing to issue the approval documents as soon as possible, most of them are getting The second week after the approval, the opportunity to publish the prospectus file, next week is the time window, the market may wish to hold their breath.
Foxconn 'General'
According to information released by Foxconn before, Foxconn’s overall revenue in 2017 was 353.08 billion yuan, of which, communications network equipment revenue was 214.5 billion yuan, accounting for 60.75%, and cloud service equipment (including traditional servers) was 120.39 billion yuan. , accounting for 34.10%, precision tools and robots (19.800, -0.56, -2.75%) revenue 966 million yuan, accounting for 0.34%.
The annual revenue of more than RMB 350 billion is indeed huge. In the current China, only two companies, Huawei and Foxconn, have exceeded this scale. Lenovo, Baidu, Ali and Tencent have not exceeded 300 billion in annual revenue.
Foxconn’s major shareholder, Hon Hai Precision, is the world's largest foundry company. Moreover, Foxconn is already a major player in China’s domestic foreign trade. In 2016, Foxconn’s import and export volume in Henan was as high as 317.2 billion yuan, accounting for the whole of Henan Province. Over 70% of the import and export volume. In 2016, Foxconn’s total import and export accounted for 3.6% of China’s total import and export volume. Foxconn’s influence on China’s foreign trade is relatively large.
Foxconn's main customers include Amazon, Apple, ARRIS, Cisco, Dell, HPE, Huawei, Lenovo, NetApp, Nokia, nVidia, etc., all of which are well-known electronics industry brand companies. Most of these companies are currently booming, and the market value of Apple is close to 9,000. Billion dollars, Amazon's market value exceeds 700 billion US dollars.
Although the absolute amount of profit is huge, the net profit rate is not high. Taking 2017 as an example, the net profit of 15.87 billion yuan is the sales revenue of 354.5 billion yuan, and the net profit rate is less than 5%. The foundry industry has always been small profits. The combined gross profit margin of Foxconn Industrial Internet in 2015, 2016 and 2017 was 10.50%, 10.65% and 10.14%, respectively, which was comparable to that of comparable companies in the same industry.
In addition, as of the end of 2017, Foxconn Industrial Internet’s total assets were RMB 148.6 billion, total liabilities were RMB 120.4 billion, and the debt ratio was about 81%, which was nearly double compared to 43% as of the end of 2016. The increase in Foxconn's liabilities was mainly due to the fact that Increase in accounts, According to the prospectus, at the end of 2017, the book value of accounts payable of the company increased by 33.796 billion yuan compared to the end of 2016.
According to the manuscript prospectus, Foxconn plans to invest a total of 27.253 billion yuan in major investment in eight sectors, including industrial internet platform construction, cloud computing and high-performance computing platform, efficient computing data center, communications network and cloud service equipment, 5G and the Internet of things. Interconnect solutions, R&D and application of new intelligent manufacturing technologies, smart manufacturing industry upgrades, smart manufacturing capacity expansion, etc.
Among them, smart manufacturing industry upgrades, smart manufacturing new technology research and development applications, communications networks and cloud service equipment, etc., rank the top of the list, with investments of 8.662 billion yuan, 5.108 billion yuan and 4.968 billion yuan respectively.
Large differences in valuation
Some brokerages expect that Foxconn will issue 1.96353 billion IPOs this time. It is expected that the issue price will be around 13.84 yuan, and the corresponding P/E is 17.18 times. Based on this estimate, Foxconn's valuation is 273.1 billion yuan. The valuation of Foxconn is very different among major securities companies. Large, as low as 15 times P/E, as high as 40 times, with a drop of 300 billion yuan.
According to the industry division of the China Securities Regulatory Commission, Foxconn should be a manufacturer of computers, communications and other electronic equipment. Currently, the company with the largest market value in this sector is Hikvision (39.980, -0.47, -1.16%) with a market value of nearly 400 billion yuan, 42 times earnings ratio. The weighted average price-earnings ratio for the sector given by the reference to the China Securities Index is 43.07. Based on this calculation, the market value of Foxconn could reach 680 billion yuan.
Obviously this statement may be overly optimistic and unlikely. Many brokerage analysts generally believe that it is reasonable between 20x and 25x, and the reasonable market value is between RMB320 billion and RMB400 billion.
A brokerage TMT industry analyst said, 'Attracting eyeballs does not equal to obtaining a high valuation. Foxconn’s parent company Hon Hai Precision’s current P/E ratio is only 10 times. The recent share price has not been affected by Foxconn's A-share listing, indicating that overseas investors Still more cautious. According to its distributed valuation of each business, 22 times to 25 times more secure. 'At the same time, the analyst believes that affected by the performance of important customers such as Apple's market performance, it is expected that Foxconn's stock performance in 2018 will have a higher probability of flat year-on-year .