Recently, Foxconn disclosed that its IPO issue price was finalized at 13.77 yuan per share, which was lower than the 14.04 yuan/share estimated by the market organization according to the issuance scale. This price is equivalent to the issue price-earnings ratio of 17.09 times.
This also means that the issuance of the 1.97 billion shares of Foxconn will be determined to be 27.127 billion yuan, and the market value at the time of issue will be 271.2 billion yuan.
According to the announcement, Foxconn's top-level purchase limit was determined to be 413,000 shares; 21st Century Business Herald estimated that the signing ratio is expected to be around 0.5%, and investors will participate in the top-level market with a market value of more than RMB 4 million based on the previous subscription ceiling and the winning percentage. The purchase of Baozhong 1-2 or will be a high probability event.
If the industry is trading at a multiple of P/E ratio, the repurchase of Foxconn will be expected to give some new investors relatively stable earnings expectations. However, some investors have also stated that Foxconn’s issuance size is relatively large, taking into account the profitability of some new players. , still have to be alert to market risks after its listing.
Less than expected
Compared with the previous market expectations, the Foxconn issuance pricing of 13.77 yuan/share after the inquiry seems to be on the low side.
In fact, 14.04 yuan/share is the estimated price of most agencies. According to the announcement, after excluding the invalid quotes, the median quoted price of all the placing participants who participated in the preliminary inquiry was 14.04 yuan/share. The median quoted price of the six major institutions (public funds, securities companies, trust companies, financial companies, insurance institutions, and QFII) is also RMB 14.04 per share.
However, as "the total weighted average price of all securities investment fund management companies" is 13.77 yuan/share, and according to the arrangement, the issue price is determined as the weighted average and median of the six major categories of institutions, and all securities investment fund management companies declare prices The weighted average and the median of the four numbers are “孰 孰 值 值 孰 孰 孰 孰 孰 孰 , , , , , , , , , , , , , , , , 。 。 。 。 。 。 。 。 。 。 。 。 。 。 。 。 。 。. Therefore, the final price of 13.77 yuan per share becomes the issue price of Foxconn.
Foxconn also said that the above prices are based on a comprehensive consideration of the issuer's fundamentals, market conditions, valuation of listed companies in the same industry, demand for funds raised, and underwriting risks.
"The median price is higher than the average value, which is related to the large number of investors participating in quotation agencies and the low price quoted by many agencies." On May 23, a private equity agency official who participated in the declaration said.
According to the release announcement, there were 2,312 investors participating in Foxconn’s initial inquiry in this round, and 3284 placement targets.
Facing such a large number of reporting organizations, Foxconn has been working hard for the inquiry roadshow. For example, the chairman of the group, Guo Ting-Ming, recently ran out of intensive presentations.
The 21st Century Business Herald reporter learned that on May 15th, Terry Gou participated in a roadshow in Shenzhen, in which a number of institutional investors participated in and given a valuation; and in the afternoon of the same day, Terry Gou also met with Jiang Xiangyang, general manager of Bo Shi Fund. Negotiations; two days later it also spoke at the Tianjin World Smart Conference and disclosed Foxconn's layout in the Internet and artificial intelligence.
"Guo Mingming has been running for the listing of the inquiry, has been in the road show before the ticket." Recently, a person close to Foxconn revealed.
However, Terry Gou's run failed to bring Foxconn's issue price to market expectations, and the fundraising amount determined based on this price would be 27.127 billion yuan, but this fund-raising scale still set a new record since the listing of Guotai Junan in 2015. Foxconn’s market value also stood at 271.2 billion yuan, surpassing the 390.SH.
“At the time, the market was concerned about whether Foxconn could become the largest market capitalization stock in technology stocks. From the valuation of the issue price, there is still a gap in this target.” On May 23, a large securities brokerage strategist in Beijing commented frankly.
Compared with the valuation of 271.2 billion yuan, there is still a technology stock that exceeds Foxconn's market value, which is Hikvision (002415.SZ) with a total market value of 375.8 billion yuan; even if Foxconn reached the highest gain of 44% on the day of listing. Its market value is still equivalent to Hikvision.
It's much anticipated
With the huge financing of 27.127 billion yuan, Foxconn's issuance has also given investment opportunities to new players.
Since the part of the online issuance is 413.6 million shares, the upper limit of online subscription is 41.3 million shares, and the corresponding market value of Top Grid subscription needs 4.14 million yuan.
After the IPO new shares purchase new regulations landed, Foxconn's subscription ceiling was between the 540,000 subscription limit of Huaneng Hydro (600025.SH) and the subscription limit of 346,000 shares of Jiangsu Bank (600919.SH); therefore, Brokerage companies believe that the Foxconn winning rate is also expected to be between the above two companies that is between 0.47% -0.51%.
This means that if an investor purchases Foxconn at the top level, there will be a large probability of winning the number 1-2.
"About 0.5% of the success rate means that 200,000 subscriptions will get a sign." On May 23, the manager of a listed brokerage business in Fujian said, "If there are more than 4 million market value, then the acquisition of Foxconn will be very likely At the meeting, this purchase is equivalent to a risk-free return."
More analysts believe that after Foxconn is listed, it is expected to obtain a higher valuation, and this may bring higher returns to the new successful investors.
Guo Jin Securities pointed out that Foxconn has obvious scarcity in the A-share market. If calculated in accordance with the 30-fold P/E ratio and the issuance of new shares, Foxconn’s market value is expected to exceed RMB 500 billion.
Some investors also stated that Foxconn’s market value is likely to be higher given the new stock effect and sector valuation.
"If the national average index of the stock index is more than 40 times, Foxconn's market value may be higher, and there is a new stock effect. When the stock price is the highest, it may even be over 40 times the valuation of the price-earnings ratio." May 14, A head of a private equity agency in Beijing pointed out.
However, in the case of large-scale issuance, the profit-taking of new investors may also create a sell-off for Foxconn’s new share effect.
"Some institutions that have played new strategies will inevitably participate in Foxconn's new game, but they will often choose to sell profitably at the beginning of the upswing. This will bring down the pressure on Foxconn, a large market capitalization stock, so whether to wait until Foxconn PE rises To 23 times or even higher, it also requires a specific assessment of investors with different risk preferences.” Said the head of the private equity agency said.