Produced by Phoenix.com Finance No. 4 Qiyang Road, Qiyang Road, Phoenix.com | Yi Dian Editor | Peng Bin
June Guo Taiming was in full bloom, and the American factory broke ground. Industrial Foxconn ringed the bell and went public on the Shanghai Stock Exchange. The listing issue price was 13.77 yuan. On the third day of listing, the stock price once rose to 26.36 yuan, and the market value exceeded 500 billion yuan. However, in just four months, the market value shrank to 270 billion yuan, the market value evaporated by nearly half, and it fell below the issue price for three consecutive trading days.
At the beginning of its listing, the company focused on the concept of industrial Internet, but the semi-annual report showed that the company's net profit margin in the first half of this year was only 3.42%, which is not only at a low level in the Internet industry, but also at a low level in the electronics manufacturing industry.
No. 4, Qiyang Road, Phoenix.com (ID: qiyanglu4hao) noticed that the company's US project was "a mess" before it started, and it is still facing environmental protection troubles.
4 months, fell below the issue price
June 28, 2018, under the scorching sun, a group of big figures in suits and ties were welcomed in a small town with a population of less than 20,000 in Wisconsin, a group of big figures in suits and ties, including US President Trump , Congressman, and Wisconsin Governor. Among a group of white people, there is an Asian face that stands out. Today he is the protagonist here, and he is Foxconn founder - Terry Gou.
At 12:30 noon, Trump and Terry Gou took hoes and the construction ceremony officially began. After the five big bosses symbolically shoveled two handfuls of soil, Trump put down the shovel, held Guo Taiming's shoulder tightly, and pulled him toward him.
Behind them are three excavators and a huge American flag. Under them is a vast flat land with an area of 20 million square feet, the size is equivalent to two Pentagons. After a long period of time to choose a site, Foxconn finally chose this "Feng Shui Treasure Land" - it is adjacent to Lake Michigan, an hour's drive from Chicago , and it also has a very festive name - Mount Pleasant.
At this time, Terry Gou was so proud. 
7 days before , that is, on June 11, 2018, Foxconn (Foxconn) was listed on the Shanghai Stock Exchange with a bell of 3.77 yuan, and the issuance price is 17.09 times . On the third day after its listing, the stock price once rose to 26.36 yuan, and the market value of reached 519.3 billion .
, and Foxconn only took 36 days to pass the review, setting the fastest record for passing the review, attracting attention from all parties.
However, it only takes 4 months from peak to trough.
On October 8, the first trading day after the National Day, the closing price of FUC Industrial and Commercial Bank was 13.72 yuan, falling below the issue price. In the following two trading days, the stock price continued to hover below the issue price.
diagram shows that today's Industrial FUCCI closed quotation
to October 10, the company's market value shrank from its listing highest point of 519.3 billion yuan to 270 billion yuan, and its market value evaporated by 48% in just four months.
Compared with Foxconn, the parent company of Foxconn, Hon Hai Precision, the current price-to-earnings ratio is only 9.86 times, while Foxconn's issuance price-to-earnings ratio is 17.09 times, and Foxconn's current dynamic price-to-earnings ratio exceeds 24 times.
diagram Hon Hai Precision Stock Market Chart
"Industrial Fulian" is not worthy of its name
At the beginning of its listing, Foxconn did not want to be considered an OEM factory by the outside world. The company hopes to put on the cloak of the industrial Internet, and even embed the industrial Internet into the company's name 沪州公司.
In the prospectus, the company plans to invest 2.117 billion yuan to build an industrial Internet platform, which will be implemented by its subordinate companies Shenzhen Fugui, Nanning Fugui and Tianjin Hongfujin respectively.
Industrial Fulian said that the investment in industrial Internet platform projects raised is mainly concentrated on technological upgrading and transformation. On the basis of the existing production lines, update the IT system architecture, import automation assembly lines, and increase the proportion of factory automation; in the technical part of the cloud platform construction, the issuer will set up a distributed data storage architecture, reconstruct and meet system requirements, and at the same time improve real-time data query and processing solutions, integrate visual analysis tools, so that users can adapt to management reports by themselves and reduce duplicate operations. After the project is completed, the issuer has the ability to achieve interconnection between machines, between machines and between people, and between people, and improve production efficiency.
"This project is not expected to directly generate economic benefits, but through production management virtualization and visualization, the issuer can realize scientific personnel arrangements, reduce duplicate operations, and reduce labor and time costs; on the other hand, after the automation of the data maintenance and screening mechanism, the issuer can optimize the allocation of existing resources, thereby increasing investment in innovation and development and enhancing competitiveness in the industry." said FUCCI.
However, the company's profit margin is not the profit of the Internet industry . On August 13, Foxconn disclosed its first financial report after its listing. financial report data shows that the revenue of FULL in the first half of 2018 was 158.99 billion yuan, a year-on-year increase of 16.29%, and a net profit of 5.44 billion yuan, a year-on-year increase of only 2.24%, and the company's net profit margin was only 3.42%.
According to the classification statistics of Tonghuashun Electronic Manufacturing Industry, among the 58 listed companies, the net profit margin of 3.42% can only rank 36th.
"One Land Chicken Feather "
In addition to domestic projects, the company's international projects are not going well.
In July 2017, Foxconn and Trump announced at the White House that Foxconn will build a $10 billion flat-screen TV manufacturer in southeastern Wisconsin, USA, pledging to provide 13,000 jobs. In terms of employment, this is the largest foreign company attracted in the history of the United States.
was originally a great achievement that Trump was proud of, but it aroused many doubts, making Foxconn "a mess" before it even started construction.
The first question is whether the US government should spend nearly $5 billion to subsidize a foreign company? According to GoodJobFirst statistics, the subsidies from state and local governments are as high as US$4.8 billion, and the federal government's subsidies (including subsidies and tax exemptions) are 16 million, and the two items are totalling US$4.82 billion.
The reason why US local governments are willing to invest heavily in investment is the most important thing about the employment opportunities Foxconn can provide as a manufacturing enterprise. According to the US electoral system, behind every job is a vote, and Wisconsin is a famous "swing state" in the US presidential election, and every extra vote can be closer to victory. The question is, does Foxconn need to recruit so many workers?
The data given by Trump is 13,000 people, which is equivalent to the government subsidizing $370,000 for every job. However, the Foxconn Group released a press release saying that "this investment will create 3,000 jobs, which may increase to 13,000 in the future." Some media and politicians are full of doubts about whether Foxconn can fulfill its promise of 13,000 jobs, and has sharply reduced from 13,000 to 3,000, which is equivalent to the government's subsidy of 1.61 million US dollars for each job opportunity.
diagram Foxconn Group’s screenshot of the press release
. According to data from the U.S. Bureau of Statistics, the average annual income of households in 2017 was US$61,000. Is it cost-effective to subsidize a foreign company at a price of more than 20 times?
Faced with these questions, the state government office gave another analysis report. According to Foxconn's investment amount (7 billion to 9 billion US dollars), every $1 subsidy can create GDP growth of $18-34, which can contribute up to Wisconsin's GDP of up to $51 billion.
Illustration According to Foxconn's investment amount (7 billion to 9 billion US dollars), every $1 government subsidy can create GDP growth of 18-34 US dollars
In order to attract Foxconn to settle down, the Wisconsin legislature held a special meeting to formulate a "super gift package" including tax deduction and environmental impact assessment exemption - including business tax relief, personal income tax deduction (17 cents per dollar), repairing I94 Intercontinental Highway next to the Foxconn construction site, $1.5 billion in wage credit and $1.35 billion in capital credit.
At present, Foxconn's US recruitment website has been launched, and there are currently 263 job openings, and a large number of job locations are Huanxishan. Unlike Foxconn, which recruits a large number of assembly line workers in China, it recruits a large number of professionals in Wisconsin, and even senior management, such as chief architect, chief engineer, senior purchasing manager, web development engineer, technical support specialist, etc.
Illustration Foxconn's US recruitment website has been launched now, with 263 vacancies, most of which are technical positions
can't bear to leave their children and can't trap them.In order to "trap" Foxconn, Trump took action personally and the US local government took out real money.
diagram The total subsidies of the US state government and the federal government to Foxconn are as high as US$4.8 billion
However, what is more criticized by the public than real money is that Foxconn is exempted from multiple "environmental assessments", and many strict environmental protection requirements also make way for economic demand.
Like China, large-scale projects in the United States must pass the "Environmental Assessment" (Environmental Impact Assessment) before the construction of large-scale projects in the United States can only be implemented after the "Environmental Assessment" is reviewed. The "Environmental Assessment" in the United States is divided into two levels: state and federal government. Wisconsin has passed a bill that exempts several state-level assessments. The most controversial one is the exemption of water quality evaluation.
Happy Mountain is a well-known geographical location, one hour's drive from Chicago, close to Lake Michigan, one of the Great Lakes. Foxconn uses a lot of water resources during its production process. According to the Clean Water Act, it is prohibited to discharge landfill materials, industrial wastewater and other wastewater into navigable waters without a license. Generally speaking, a license is required by the state government first, and then a federal license is issued by the U.S. Army Corps of Engineers. However, in the "big gift package" given by the local government, the state water quality license is directly exempted. While Foxconn still needs to apply for federal certification, it theoretically can discharge construction materials into non-federal waters without breaking the law.
Of course, the "generous" state government has not been exempted from all the exemptions, and the green light is on the way to the end. The state government requires Foxconn to restore at least 2 acres of wetland area for every acre of use or damage. The compensation ratio of wetland area of 12 times is higher than the statutory standard. According to the current law, the general compensation standard is 1:1.2 (i.e., 1.2 acres are compensated for every 1 acre of wetland used). The exemption of
environmental protection assessment has also been widely criticized. Many American netizens bluntly stated in relevant articles: "Lake Michigan is a valuable resource left to our descendants in a hundred years. How can a foreign company be polluted?" Although Foxconn also promised to keep the water source clean, Huanxi Mountain's location close to the water source still makes many local people worried.
This article is from No. 4 Qiyang Road
For more exciting information, please come to the Financial World website (www.jrj.com.cn)
