Hon Hai Readies Biggest IPO in China Since 2015
Hon Hai is racing ahead with an initial public offering of its automated factory division that may become China’s biggest debut since the 2015 stock market crash, according to Bloomberg.
Foxconn Industrial Internet, a unit of Apple’s most important assembly partner, won approval to list in Shanghai about a month after publishing a prospectus that outlined plans to spend 27.3 billion yuan ($4 billion) on expansions into cutting-edge technology. That speed underscores the anticipation around the Taiwanese company that embodies billionaire Terry Gou’s ambition of moving beyond assembling PCs and phones for the world’s top electronic brands.
Known as FII, the business could command a valuation of as much as 400 billion yuan by some estimates, on par with Sony. With sales of 355 billion yuan in 2017, its revenue is about the same as Walt Disney or HP. The fundraising could be the 11th largest on the mainland and would be one of the highest-profile tech listings in Shenzhen or Shanghai in years.
Foxconn, which makes smartphones, cloud computing equipment and robots, wants the 27 billion yuan to fund projects including artificial intelligence and fifth-generation wireless technologies, positioning Hon Hai even more centrally in the tech supply chain. Foxconn representatives didn’t respond to a request for comment. Beijing has introduced plans to welcome Taiwanese investment in some of the nation’s most restricted sectors, though pro-independence Taiwan President Tsai Ing-wen has warned that such moves could suck away much-needed capital.
Foxconn’s debut also dovetails with an effort to bring tech listings back to the mainland. Chinese enterprises have long pursued the prestige and capital associated with marquee overseas debuts. But technology businesses from Alibaba to Tencent have in recent years outstripped their old-economy peers to become the nation’s largest, and virtually none are traded domestically.