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Foxconn hit A shares: nearly 270,000 employees doubled its debt to 120.4 billion last year

via:CnBeta     time:2018/2/10 13:31:19     readed:488

Honor listing commitments

Hon Hai Precision was founded in 1974, is the world's electronics "foundry giant", the founder is Gou. Its mainland business is Foxconn.

Foxconn, as the main business of Hon Hai Precision Group in mainland China, has been attracting much attention.

According to the official website, Foxconn Technology Group is a hi-tech enterprise specialized in the research, development and manufacturing of 3C products such as computers, telecommunications and consumer electronics. It has extensive involvement in the development and application of digital content, automotive components, access roads, cloud computing services and new energy and new materials. Is the world's largest electronics manufacturing technology service provider. In 2016, the total import and export volume accounted for 3.6% of the total import and export volume in mainland China; in 2017, it ranked 27th among Fortune Global 500.

Back in June 2015, Hon Hai Chairman Terry Gou said at the meeting that Hon Hai's business in mainland China may be disembarked in Shanghai and Shenzhen stock markets within the next three to five years. This means that Foxconn, Hon Hai's huge foundry in mainland China, will likely go public for financing.

On the evening of December 13 last year, the Taiwan Stock Exchange announced that Hon Hai Precision Board through its subsidiary Foxconn Industrial Internet Co., Ltd. initial public offering of RMB ordinary shares and apply for listing on the Shanghai Stock Exchange.

For Foxconn's listing, some media pointed out that there are more than 20 Taiwanese investors who have taken part in the A-share market. However, it is the first time that a Taiwan-funded holding company seeks A-share listing.

The prospectus, released on February 9, shows that the controlling shareholder of Foxconn Industrial Internet Inc. is the dominant firm. Founded on November 29, 2007, Zhongjian Company is an investment-holding company that owns 100% of the equity of Hon Hai Precision indirectly. As of the signing date of this prospectus, because there is no actual controller of Hon Hai, so the company does not exist the actual controller.

Big Mac Foxconn: total liability 120.4 billion debt ratio of about 81%

From a business point of view, Foxconn mainly engaged in various types of electronic equipment product design, development, manufacturing and sales operations, the current main products include communications network equipment,cloud serviceEquipment, precision tools and industrial robots. The products are mainly used in smartphones, broadband and wireless networks, infrastructures for multimedia service providers, infrastructure for telecom operators, Internet value-added service providers Need to end products, enterprise networks and data center infrastructure and precision core components of automated intelligent manufacturing.

One of the characteristics of Foxconn is "big." As of December 31, 2017, Foxconn employs 269,049 people. Among them, the manufacturing 200000 people, accounting for 75.57%; R & D / project 40,000, accounting for 14.90%; sales / administration / management 25662 people, accounting for 9.54%.

Not only the number of people. According to the prospectus, Foxconn achieved revenue of RMB272.8bn, RMB272.7bn and RMB354.5bn respectively in 2015-2017. Operating revenue in 2016 decreased slightly by 0.03% from 2015 and revenue in 2017 increased by 30.01% as compared with that of 2016.

In terms of net profit, Foxconn posted a record high of 14.35 billion yuan, 14.37 billion yuan and 15.87 billion yuan respectively from 2015 to 2017, of which net profit in 2016 increased 0.11% over 2015 and net profit in 2017 increased 10.45% over 2016.

Foxconn said that at present, the cooperation between the Company and its major customers is stable. However, with the continuous expansion of investment, R & D investment and industry and market competition, customer structure, product prices, raw material prices, labor costs and expansion progress If the company can not respond to the above factors change in the future, there is a risk that future business performance will not maintain rapid growth, fluctuating operating performance and declining operating profit.

As for assets and liabilities, Foxconn's total assets were 148.6 billion yuan by the end of 2017, total liabilities of 120.4 billion yuan and debt ratio of about 81%, nearly double the 43% as of the end of 2016. Its total liabilities as of the end of 2016 was 58.2 billion yuan, which means that compared with 2016, Foxconn's liabilities increased by 622.2 billion yuan, an increase of 106.8%, to double.

Prospectus shows that as of December 31, 2017, Foxconn consolidated statement of caliber liabilities amounted to 120.414 billion yuan, of which current liabilities amounted to 120.382 billion yuan, total non-current liabilities of 0.32 billion. Corporate liabilities mainly consist of accounts payable, other payables, short-term borrowings and employee benefits payable.

Foxconn's increase in liabilities was mainly due to the increase in accounts payable. According to the prospectus, as of the end of 2017, the book value of the Company's accounts payable increased by RMB33,796 million as compared with the end of 2016.

Foxconn said the main reason is that since 2017, the downstream order volume has a good growth trend, and the company has increased the purchase amount of raw materials and equipment accordingly.

Foundry puerile has always been the focus of the outside world. In this regard, Foxconn disclosed in the prospectus, the company's consolidated gross profit margin for 2015, 2016 and 2017 respectively were 10.50%, 10.65% and 10.14%. Compared with the same industry companies, Foxconn gross margin comparable.

Foxconn said that in the most recent year, the consolidated gross profit margin, though lower, remained generally stable at a stable level and its profitability was good. The main reason is that the smart manufacturing industry of electronic equipment has been developing steadily. The profit level of the industry as a whole has been on a steady upward trend. The market position of the Company is stable. In addition, the Company has formed long-term cooperative relations with its customers with large orders and relatively stable sales and purchase prices.

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