Taipei, June 12 (CNA) Due to a strong initial public offering on the Shanghai Stock Exchange, Foxconn Industrial Internet Co. Ltd. (FII), an Internet-based subsidiary of Taiwan-based manufacturing giant Hon Hai Precision Industry Co., has been widening a gap in market value with its parent company.
On June 8, the first day of FII's trading in Shanghai, the stock rose 44 percent, the maximum increase, to 19.83 Chinese yuan (US$3.1) which made its market value top Hon Hai's for the first time, and the gap has continued to widen.
On Tuesday, FII rose 10 percent to 23.99 Chinese yuan after another 10 percent increase a day earlier, marking the third consecutive session for the stock to rise to the day's increase ceiling after it made its debut on the Shanghai Stock Exchange.
Based on FII's current share price, the stock boasted a market cap of 471.8 billion yuan Tuesday, up from about 430 billion yuan the previous day.
In Taipei, Hon Hai shares closed up 0.34 percent Tuesday to close at NT$87.70 (US$2.93) and claimed a market capitalization of NT$1.52 trillion, up from NT$1.515 trillion.
The figures show that the gap in market value between FII and Hon Hai had widened to about NT$670 billion Tuesday from NT$485 billion a day earlier.
In the three trading sessions, FII shares rose about 74 percent from the issue price of 13.77 yuan.
FII's market value was the 11th-highest among all yuan-denominated A shares listed on the Shanghai and Shenzhen exchanges. One foreign brokerage even forecast that FII shares will continue to move higher and issued a target price of 24.6 yuan.
Wellington Koo (顧立雄), chairman of Taiwan's Financial Supervisory Commission (FSC), told reporters Monday that he cared less about the widening gap between FII and Hon Hai in market value after the subsidiary launched and more about whether Hon Hai is moving some major businesses and repackaging them for FII, a move that he said could erode the parent company's operations.
FII's IPO in Shanghai has caught attention from the market as the China Securities Regulatory Commission (CSRC) took only 36 days to approve the listing proposal earlier this year, even though the processing of such applications in China usually takes about a year.
In late May, FII set up strategic partnerships with a group of Chinese enterprises to which the Hon Hai unit issued new shares. Among the Chinese partners are e-commerce giant Alibaba Group Holding Ltd., search engine Baidu Inc. and online services provider Tencent Holdings Ltd.
FII's initial public offering helped raised 27.12 billion yuan, which Hon Hai said will be used for investment in its new software-based areas of interest in China.
After the IPO, Hon Hai retains an 84.8 percent stake in FII, which has as its major clients global heavyweights such as Amazon, Apple Inc., Dell Inc., U.K.-based telecom equipment provider Arris International Plc., and Chinese smartphone brand Huawei Technologies Co. and PC vendor Lenovo Group Ltd.
(By Chung Jung-feng and Frances Huang)
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