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The Foxconn Industrial Internet IPO has been Given Fast-Track Approval from the Chinese Government

1 X Cover Foxconn Industrial Internet

 

Foxconn Industrial Internet, a unit of the world's biggest contract manufacturer whose products include Apple's iPhones, was put on the fast track for securing the nod by China's securities regulator to raise capital through an initial public offering.

 

The unit of Taiwan's Hon Hai Precision Industry has been approved by the China Securities Regulatory Commission to raise US$4.3 billion in an IPO, according to a notice by the regulator. Foxconn filed its stock-sale application on February 1.

 

The offer would be China's biggest stock sale since the 30.6 billion yuan IPO by Guotai Junan Securities three years ago, putting it on path to become the largest technology company by market value on the mainland, with 500 billion yuan in market capitalization expected after the listing, analysts said.

 

The Foxconn unit intends to offer about 1.8 billion shares, or 10 per cent of its capital, using the proceeds from its IPO to fund eight new projects including cloud computing, building a data center, 5G and the Internet of Things (IoT) projects and expansions into so-called intelligent manufacturing, according to its stock sale prospectus. Its net income rose 43.8 per cent last year to 15.87 billion yuan.

 

Ivan Li, an asset manager with hedge fund group Loyal Wealth Management stated for the Chinese report that "Foxconn will be the new darling of Chinese investors since it is supported by the government."

 

The speedy approval of Foxconn's application underscores the priority China is giving to technology companies, in the competition with Hong Kong as Asia's hub for fund raising. Shanghai overtook Hong Kong last year in initial fund raising for the first time.

 

Foxconn isn't the only technology company that's being courted to raise capital on the mainland. Other companies in the pipeline include China's dominant ride-sharing company Didi-Chuxing (which Apple invested in back 2016). Others noted are the Meituan-Dianping, China's biggest on-demand internet service provider, and Ant Financial Services Group, which is an affiliate of Alibaba Group Holdings.

 

2 Foxconn Industrial Internet

No date was given as to when Foxconn's IPO will be made public.

 

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