Feb. 11 (NBD) -- Foxconn Industrial Internet Co., Ltd. (hereinafter referred to as "Foxconn Industrial"), a subsidiary of the world's leading contract electronics manufacturer Foxconn Technology Group, has gained feedback for its initial public offering (IPO) prospectus from the China Securities Regulatory Commission. This signifies the company's plan to get listed on the Shanghai Stock Exchange is being accelerated.
Company aims to raise 4.3 billion U.S. dollars
Also known as a key supplier of tech giant Apple, Foxconn Industrial has chosen China International Capital Corporation Limited, China's first joint-venture investment bank, as the lead underwriter for its IPO.
The company seeks to raise around 27 billion yuan (4.3 billion U.S. dollars) in the IPO, and the money raised will be invested to boost the construction of industrial internet platforms as well as development of smart manufacturing, communication network, and cloud services.
Founded on March 6, 2015, Foxconn Industrial mainly engages in the design, research and development, manufacturing, and sale of electronic equipment, including cloud service equipment and industrial robots. It now has up to 60 wholly-owned or holding companies at home and abroad.
Because of the labor-intensive nature, the electronic equipment manufacturer has employed up to 269,049 employees.
In addition to the large number of employees, the company did a great job in business performance.
Last year, the company reported revenue of 354.5 billion yuan (56.1 billion U.S. dollars) and net profit attributable to shareholders of 15.87 billion yuan (2.5 billion U.S. dollars), up 30.01 percent and 10.45 percent, respectively, from the year earlier.
Its total assets reached 148.6 billion yuan (23.5 billion U.S. dollars) at the end of 2017 while the total debts were 120.4 billion yuan (19.1 billion U.S. dollars). The debt ratio was about 81 percent, almost doubled ovet the past year. The increase of debt was due to the rise of accounts payable, which increased 33.796 billion yuan (5.3 billion U.S. dollars) in book value from the 2016 level.
Whether to incorporate OEM business for Apple gains focus
Whether Foxconn Industrial will incorporate the OEM business for Apple has come into focus.
Foxconn Industrial built up a fortune through its OEM business and rose to fame because of the partnership with Apple.
The company's bases in Zhengzhou, capital of central China's Henan province, are major assembly facilities for iPhones. Around half of Apple's iPhones were made by Futaihua Precision Electronics (Zhengzhou) Co., Ltd. and Henan Yuzhan Precision Technology Co., Ltd., both of which reported remarkable net profits last year.
Foxconn Industrial's sales and procurement orders also show a sign of huge dependence on Apple.
Data obtained in late 2017 shows that the top 3 sales and procurement orders in process were all from Apple.
However, Foxconn Industrial doesn't want to boast the close partnership with Apple. The company always uses "an famous U.S. brand" to replace Apple when it has to mention the tech behemoth.
In the prospectus, the equipment maker spells out risks concerning high customer concentration level. Its major clients include Apple, Amazon, Huawei, Dell, Lenovo, and Cisco, all of which are big names in the global electronics industry. The company didn't name its top 5 clients, but said combined revenue from the five clients accounted for 76.81 percent of its total in 2015, 78.63 percent in 2016, and 72.98 percent in 2017.