Foxconn unit’s US$4.27 billion IPO sparks Chinese buying frenzy
Foxconn Industrial Internet’s shares allocated to the public online were almost 300 times oversubscribed ahead of China’s biggest IPO for three years
Foxconn Industrial Internet sparked a buying frenzy for its IPO shares among mainland Chinese investors, buoyed by expectations that its price will surge after listing.
The subsidiary of the world’s biggest contract electronics manufacturer, Hon Hai Precision Industry, whose products include Apple’s iPhones, priced its 1.8 billion IPO shares at 13.77 yuan (US$2.16) apiece, slightly below the 14.04 yuan predicted by the market. That puts it on course to net 27.1 billion yuan (US$4.27 billion) in the mainland’s biggest new listing in three years.
Its 1.06 billion shares allocated to public investors via online subscription were 294 times oversubscribed, the company said in a statement on Thursday night.
The remaining IPO shares were earmarked for institutional and corporate investors.
“Technology stocks are the darlings of Chinese investors, and Foxconn will see its share price jump after trading debut,” said Ivan Li, an asset manager with hedge fund Loyal Wealth Management. “It remains to be seen whether it will become the largest A-share tech company in terms of capitalisation.”
As of Thursday, Wuxi AppTec, a leading mainland biotechnology firm, had soared to its daily trading limit for 13 consecutive days since debuting on May 8, chalking up a gain of 352 per cent.
Foxconn’s IPO, set to be the largest on the A-share market since Guotai Junan Securities’ 30 billion yuan offering in June 2015, would give the company a total market value of 271.2 billion yuan.