China to review Hon Hai unit IPO application unusually quickly

2018/03/05 16:09:56 fontsize-small fontsize-default fontsize-big
China to review Hon Hai unit IPO application unusually quickly

Taipei, March 5 (CNA) China's top securities regulator will soon review an initial public offering (IPO) application filed by a subsidiary of Taiwan-based manufacturing giant Hon Hai Precision Industry Co.

In a statement released Sunday, the China Securities Regulatory Commission (CSRC) said it will hold a meeting on Thursday to review the application of Hon Hai subsidiary Foxconn Industrial Internet Co. Ltd. (FII) to launch an IPO on the Shanghai Stock Exchange.

The review is expected to be completed quickly, with FII likely to list in April as a Chinese yuan-denominated A share stock in Shanghai, according to Chinese media.

CSRC's announcement of the review schedule surprised the market, Chinese media said, but the regulator appeared to be moving with unusual speed to deal with Hon Hai's case.

Reviews of IPO case in China usually take a year from the time an application is submitted to the time a company lists, media in China said.

If the IPO proceeds as planned, it will be the first time Hon Hai has listed a subsidiary in China.

Hon Hai, known as Foxconn internationally, held a special general meeting at the end of January to secure approval from its shareholders for the FII listing and submitted an IPO application on Feb. 1.

The conglomerate has said FII's listing can help it take advantage of the rapid growth of the internet communications and cloud-based computing businesses in China, and proceeds from the funds raised from FII's IPO are expected to be invested in China to expand its internet business there.

According to Hon Hai, FII's future investment in China will focus on a wide range of new technologies, such as cloud-based computing, high performance computing, 5G Internet communications solutions for industry use, data centers and smartphone-related applications.

A prospectus issued by FII showed that its major clients include U.S.-based e-commerce firm Amazon and consumer electronics giant Apple Inc., U.K.-based telecom equipment provider Arris International Plc., and Chinese smartphone brand Huawei Technologies Co. and PC brand Lenovo Group Ltd.

FII had sales of 354.54 billion yuan (US$55.85 billion) in 2017, up 30 percent from a year earlier, while its net profit rose 10.45 percent to 15.87 billion, according to the prospectus.

Hon Hai will retain a roughly 85 percent stake in the subsidiary after the IPO, FII said.

(By Chung Jung-feng and Frances Huang)

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