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Foxconn IPO's Top Ten Aspects: Financing 27.253 billion CASH Funding 350 million Underwriting Fees

via:博客园     time:2018/5/14 16:33:00     readed:101

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The amount of financing has not changed, the issue of 1.97 billion shares, stocks referred to as "industrial rich", "determined offline purchase time, China International Capital Corporation as a sponsor" … Foxconn officially disclosed the prospectus this morning.

According to the prospectus, Foxconn intends to issue approximately 1.97 billion shares, accounting for 10% of the total share capital after the issue, all of which are new public offerings and no transfer of old shares. The time of online purchase and online purchase is May 24, and the date of the signing of the lottery is May 28. China National Gold Corporation is the issuer of the sponsor. Stocks are referred to as "Industrial Riches". The financing amount was 27.253 billion yuan, which was unchanged from the amount previously disclosed.

Looking at the prospectus, there are ten key points to note:

1. The issue amount remains unchanged at 27,253 million yuan.Compared with the previous market expectation that the amount of funds raised will be greatly reduced, Foxconn's financing amount has not changed, it is still 27.253 billion yuan.

2. The proposed public offering of shares amounted to 1.97 billion shares.The number of shares issued represents about 10% of the company's total share capital after the issuance, all of which are public offerings of new shares and no transfer of old shares.

3, the first set of 30% quota strategic placement.The number of initial strategic placements is 5.9 billion shares, accounting for approximately 30% of the total number of shares issued. The difference between the final number of strategic placements and the number of initial strategic placements will be reversed based on the principle of the “callback mechanism”. Prior to the launch of the callback mechanism, the initial number of offline issuances is 965 million shares, accounting for approximately 70% of the issued amount after deduction of the initial strategic placements.

4. The initial number of online issuance is 414 million shares.About 30% of the issued amount after deducting the initial strategic placement quantity.

5. The new time is May 24.The online and offline subscription of the initial public offering of the stock was May 24, and the preliminary inquiry time was May 17 and May 18. The deadline for payment of strategic investors was May 18.

6. The strategy is locked up for a maximum of 3 years with a minimum of 1.5 years.Among the stocks allocated by this strategic investor, the lock-up period for 50% of the shares is 12 months, and the lock-up period for 50% of the shares is 18 months. Among them, in order to reflect the intention of strategic cooperation with the company, some investors may voluntarily extend the lock-up period of all their shares to no less than 36 months.

7, 70% of the network is released for 1 year.70% of the offline issuance will be locked for one year. As long as the investor who participates in the offline subscription has no choice whether to lock it, this condition must be recognized.

8. CICC made a huge underwriting fee of 348.5 million yuan.Foxconn’s sponsor representative is China International Capital Corporation. According to the prospectus disclosure, the underwriting and sponsorship fees were RMB 348.5 million.

9, the top grid hit a new 4.13 million market value.According to calculations, Foxconn needs top-four million market capitalization for the top-level subscription, which is the second highest ever.

10. The issue price is 14.04 yuan.The stock abbreviation “Industrial Rich Alliance ”, purchase code is 780138, issue price-earnings ratio is about 17.43 times, the issue price is estimated at 14.04 yuan.

At present, the amount of fund-raising investment projects has not changed, and the coincidence in time explains why Foxconn has not approved the document. It is necessary to wait for the revised contents of the issuance and underwriting measures to be grounded. Foxconn can justifiably issue strategic placements.

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The amount of investment raised remains unchanged at 27.253 billion yuan

Compared with the previous market expectation that the amount of funds will be greatly reduced, Foxconn's investment amount has not changed. It is worth noting that Foxconn's prospectus does not explicitly display the words "net raised funds" instead of the words "funds needed to raise funds to invest in projects."

According to the disclosure of the prospectus, the company’s raised funds are mainly used for the following projects:

1. "Industrial Internet Platform Construction Project" aims to integrate software such as industrial Internet, big data, and cloud computing with hardware such as industrial robots, sensors, and switches to form an industrial Internet with upstream and downstream interconnection and resource sharing functions. The system platform has an investment of 211.678 million yuan.

2. "Cloud Computing and High-Performance Computing Platform Project" ” Designed to study the related equipment and architecture of high-performance computing services, laying the foundation for the future development of high-performance computing services with an investment of 100.538 million yuan.

3. "Highly Efficient Computational Data Center Project" will be based on the establishment of an Efficient Computational Data Center to assist the company in involving automated solutions for the design and production processes in daily production operations, and constantly optimize production processes and increase production efficiency. The amount of investment is 121572. Ten thousand yuan

4. "Communications Network to Cloud Service Equipment Project" Purchased some new equipment and replaced old equipment to realize intelligent industrialized manufacturing of communication network equipment and cloud service equipment, with an investment of 4,969.93 million yuan.

5. "5G and Internet of Things Interconnect Solutions Project" focused on breaking key technologies for broadband low-latency, high-density RF communications, and developed a new generation of industrial Internet system solutions based on 5G communications with an investment of 632.88 million yuan.

6. "Intelligent manufacturing new technology research and development application project" mainly through new technology research and development applications, production equipment upgrades, technological transformation and upgrading and intelligent construction, the investment amount 510,769 ten thousand yuan.

7. Smart manufacturing industry upgrades with an investment of 866.22 million yuan.

8. Smart manufacturing capacity expansion with an investment amount of RMB 354,462,000.

A total of 27.253 billion yuan, Foxconn shares listed eight major plate business investment in the total amount and details, consistent with previous data related to the prospectus submission. If the fundraising proceeds smoothly, it will set a record for the A-share market in the past three years.

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Foxconn said that the implementation of raised capital investment projects will help consolidate and develop the company's main business. At the same time, supplementing working capital will enable the company's mailbox to reduce financial costs, enhance the company's anti-risk capabilities, and meet the increasing demand for working capital. The core competitiveness and effective reduction of overall operating risk The fund investment project is expected to have a good effect on lowering costs and improving profits. The risk is relatively small. After the funds are raised, the company will accelerate the construction of the above-mentioned raised capital investment in equity shares and increase shareholder returns.

Innovative distribution methods, introducing strategic distribution

The highlight of this release of Foxconn is the introduction of strategic allotment. Foxconn disclosed in its letter of intent for prospectus that it intends to publicly issue approximately 1.97 billion shares of stocks, which will account for 10% of the company’s total issued capital; the issuance will use strategic placements and nets. The combination of the next issuance and online issuance, in which the initial strategic placement of shares represents approximately 30% of the total number of shares issued.

Specifically, the number of issuances of initial strategic placements is 590 million shares, accounting for approximately 30% of the total number of shares issued. The difference between the final number of strategic allotments and the number of initial strategic placements will be reversed based on the principle of the “callback mechanism”.

Prior to the launch of the callback mechanism, the initial number of offline issuances is 965 million shares, accounting for approximately 70% of the issued amount after deduction of initial strategic placements; the initial number of online issuances is 414 million shares, accounting for approximately the number of shares issued after deduction of initial strategic placements 30%.

Among the stocks allocated by this strategic investor, the lock-up period for 50% of the shares is 12 months, and the lock-up period for 50% of the shares is 18 months. Among them, in order to reflect the intention of strategic cooperation with the company, some investors may voluntarily extend the lock-up period of all their shares to no less than 36 months.

The selection of strategic investors is determined after fully considering the qualifications of investors and the long-term strategic cooperation relationship with the issuer. These include mainly investors with good market reputation and market influence and representing the interests of the broad public; large state-owned enterprises or their subordinates Investors with strong financial strength, such as enterprises, large insurance companies or their subordinate enterprises, and state-level investment funds; investors with whom they have strategic cooperation or long-term cooperation vision, and who wish to hold shares for a long time.

70% of the offline issuance will be locked for one year. As long as the investor who participates in the offline subscription has no choice whether to lock it, this condition must be recognized. This measure not only safeguards the stability of the secondary market after the listing, protects the interests of small and medium investors, but also guides investors to truly invest in value and recognizes the investment value of the company.

It is worth noting that the last Friday of the China Securities Regulatory Commission (CSRC) obtained approvals for the unicorn in order to comply with certain provisions of the "Measures for the Management of Securities Issuance and Underwriting." In the newly revised issuance and underwriting method, it is clearly stated that strategic issuance and the use of over-allotment options can be made as necessary when issuing depositary receipts, so that a reasonable distribution structure and new shares (or depositary receipts) can be formed online and offline. The rhythm of the market, stabilize the market, and stabilize the hype.

At present, the amount of fund-raising investment projects has not changed, and the coincidence in time explains why Foxconn has not approved the document. It is necessary to wait for the revised contents of the issuance and underwriting measures to be grounded. Foxconn can justifiably issue strategic placements.

Some market participants pointed out that Foxconn's launch of strategic allotment has many positive aspects:

First, greatly reduce the possession of market funds, reduce the impact on the market, maintain the stability of the A-share market, and avoid large fluctuations in the market caused by the release of Foxconn;

The second is to reduce the space for speculation and protect the interests of small and medium investors;

The third is to allow more people to enjoy the "unicorn" quality and scarce resources of the dividend.

Underwriting and sponsorship costs are 3.485 billion

Foxconn’s sponsor representative is China International Capital Corporation. According to the prospectus disclosure, the underwriting and sponsorship expenses reached RMB 348.5 million, setting a new high for A shares for the past three years.

From 360 to WuXi PharmaTech to Foxconn, to the determination of Xiaomi listed on the Hong Kong stock market, many sponsored projects with unicorn characteristics were mostly included in the big investment bank.

It is expected that Xiaomi Group’s first projects will be impacted by the largest IPO in the year. The joint sponsors are CITIC Lyon Securities, Goldman Sachs, and Morgan Stanley. “Lightning” took IPO approval, raised more than 2 billion yuan of drugs, and the joint lead underwriter is China-Thailand alliance and Guotai Junan; Foxconn, 36 days rushed to the meeting, underwriting sponsorship agency for the China International Capital Corporation; the Ningde era, which was also known as the speed of the meeting, was coached by CITIC Jianshe, Goldman Sachs, Gao Hua and Industrial Securities; “Sweeping Robots” An "Corvus" was sponsored by China National Capital Corporation; the parent company of the 365 Jiangan Jiajie returning A-shares was Huatai Alliance.

It can be seen that CICC has become a big winner.

Top of the grid to play new needs 4.13 million market value

The online and offline subscription of the initial public offering of the stock was May 24, and the preliminary inquiry time was May 17 and May 18. The deadline for payment of strategic investors was May 18.

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On May 24th, it was online and offline “Playing New Day”. According to Foxconn’s total investment of RMB 27.25 billion and the number of shares issued to 1.97 billion shares, the subscription price for new shares is approximately RMB 14.04 per share. At the same time, according to estimates, if the online top-level subscriptions require a market value of RMB 4.13 million, the issuance P/E ratio is 17.43 times, which is less than 23 times, which is lower than the industry's P/E ratio of 44.18 times.

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