Foxconn Industrial Internet Co Ltd (FII, 富士康工業互聯網), a unit of the world’s largest contract manufacturer, yesterday became China’s biggest domestically listed tech company by market cap as its shares soared by the maximum 44 percent on their debut on the Shanghai Stock Exchange.
The China based Internet subsidiary of Hon Hai Precision Industry Co (鴻海精密) opened about 20 percent higher than the initial public offering (IPO) price of 13.77 yuan at 16.52 yuan, quickly climbing to 19.83 yuan.
With its strong start, FII saw its market capitalization rise from 271.2 billion yuan (US$42.3 billion) to more than 390.5 billion yuan, edging out video surveillance product supplier Hangzhou Hikvision Digital Technology Co (杭州海康威視數字技術) as the tech stock with the largest market cap among yuan-denominated A-shares listed in Shanghai and Shenzhen.
Photo: Reuters
Investors have been upbeat about FII’s future movement on the Shanghai Stock Exchange, anticipating that its market value would continue to increase, dealers said.
The optimism is based in part on FII’s strategic partnership with a group of Chinese business heavyweights to which it has issued new shares, dealers said.
The strategic partners include e-commerce giant Alibaba Group Holding Ltd (阿里巴巴), search engine Baidu Inc (百度) and online services provider Tencent Holdings Ltd (騰訊).
Photo: Reuters
FII’s listing is part of an effort by Hon Hai, known globally as Foxconn Technology Group (富士康), to integrate hardware production with software development capabilities, such as for cloud computing, Internet of Things, big data and artificial intelligence, with its contract electronics operations to expand beyond manufacturing.
FII’s IPO raised 27.12 billion yuan, which Hon Hai said is to be used for investment in its new software-based areas of interest in China.
On Thursday, FII reported a 19.78 percent year-on-year increase in consolidated sales in the first quarter of the year to 77.69 billion yuan and a 1 percent rise in profit from a year earlier to 2.63 billion yuan.
FII has forecast consolidated sales of between 146.06 billion yuan and 154.58 billion yuan for the first half of the year, a 6.8 to 13.1 percent year-on-year increase.
It has also projected a first-half net profit of between 5.35 billion yuan and 5.56 billion yuan, an increase of 0.6 to 4.5 percent from a year earlier.
After the IPO, Hon Hai retains an 84.8 percent stake in FII, which has serves global heavyweights such as Amazon.com Inc, Apple Inc, Dell Inc, Aris International PLC, Huawei Technologies Co (華為) and Lenovo Group Ltd (聯想).
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