Cash dividends of nearly 10 billion yuan, but also take out 47.6 billion yuan of funds to buy financial management. Foxconn Industrial Internet Co.Ltd(601138) ( Foxconn Industrial Internet Co.Ltd(601138) . SH), which is “not bad for money”, may set a new record for financial management of A-share non-financial listed companies.
Foxconn Industrial Internet Co.Ltd(601138) 3 announced on March 22 that it plans to purchase financial products with its own idle funds within the limit of 47.6 billion yuan. Although many A-share listed companies have spent billions or even tens of billions of yuan on financial management, there are not many that can be compared with Foxconn Industrial Internet Co.Ltd(601138) . Previously, Sany Heavy Industry Co.Ltd(600031) ( Sany Heavy Industry Co.Ltd(600031) . SH) and Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) ( Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) . SZ) have invested tens of billions to purchase financial management, but the scale is still less than Foxconn Industrial Internet Co.Ltd(601138) .
Behind the huge wealth management is Foxconn Industrial Internet Co.Ltd(601138) increasing cash assets, as well as lower financial burden and debt repayment pressure. By the end of last year, the company held 82.8 billion yuan of monetary capital, accounting for nearly one-third of the total assets, far exceeding the scale of long-term and short-term loans in the same period.
At the same time, Foxconn Industrial Internet Co.Ltd(601138) faces the pressure of performance growth. In 2021, the revenue of the company’s two major businesses increased by only 1.95% and 1.36% year-on-year. In the intraday trading on March 16 this year, the company’s share price fell as low as 9.42 yuan / share, a new low since its listing. It has fallen by more than 35% since April 29 last year, significantly underperforming the market. After a huge amount of monetary capital is invested in financial management, it can not only improve the efficiency of capital use, but also supplement profits.
47.6 billion huge wealth management
Foxconn Industrial Internet Co.Ltd(601138) 3 announced on March 22 that the financial management funds with a total amount of 47.6 billion yuan will be mainly invested in banks, bank financial management subsidiaries and other products with a term of no more than one year, such as medium and short-term breakeven financial management and structured deposits, in order to make full use of their own funds, improve the use efficiency of funds and increase the company’s income.
According to the annual report disclosed on the same day, in 2021, Foxconn Industrial Internet Co.Ltd(601138) achieved a revenue of 439557 billion yuan, a year-on-year increase of 1.8%, but the net profit attributable to the parent company reached 20.01 billion yuan, a year-on-year increase of 14.8%. Based on this calculation, the company’s financial investment scale is equivalent to 2.38 times of last year’s annual net profit.
Foxconn Industrial Internet Co.Ltd(601138) the above financial investment scale not only far exceeds its own net profit, but also ranks first among the A-share listed companies that have disclosed financial management plans this year. Data show that since this year, nearly 700 listed companies have bought financial products, with a total investment of more than 240 billion yuan. According to the disclosure, the largest is Citic Securities Company Limited(600030) , with a proposed investment amount of 8 billion yuan, followed by Jiangsu Guotai International Group Co.Ltd(002091) , Aecc Aviation Power Co Ltd(600893) , with an amount of 6 billion yuan.
In addition, Foxconn Industrial Internet Co.Ltd(601138) ‘s financial investment plan has so far been comparable to that of few A-share listed companies. Even Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) , who is keen on financial management, and Sany Heavy Industry Co.Ltd(600031) , the leader of construction machinery, have less financial management amount than the company Sany Heavy Industry Co.Ltd(600031) last March, it was disclosed that it planned to use its own idle funds of no more than 30 billion yuan to buy low-risk financial products Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) disclosed in April of the same year that the management was authorized to purchase principal guaranteed and cash management financial products according to the proportion of 30% and 40% of the audited net assets of the previous year. By the end of 2020, the net assets of the company were 38.47 billion yuan. According to this calculation, Jiangsu Yanghe Brewery Joint-Stock Co.Ltd(002304) last year, the amount of financial investment was close to 27 billion yuan.
While planning to purchase financial management in a large amount, the cash assets held by Foxconn Industrial Internet Co.Ltd(601138) are increasing continuously, while the financial burden and cost of Foxconn Industrial Internet Co.Ltd(601138) are not increasing significantly, or even decreasing.
According to the data of the annual report, by the end of 2021, Foxconn Industrial Internet Co.Ltd(601138) net assets were 119.1 billion yuan, long-term and short-term borrowings were 3.81 billion yuan and 52.13 billion yuan, with a year-on-year increase of about 11.7 billion yuan, but the net operating cash flow increased by 13.4% year-on-year, and the financial expenses in the same period were – 826 million yuan, a decrease of nearly 590 million yuan compared with the same period of the previous year.
On the other hand, after listing in 2018, with the expansion of revenue scale, Foxconn Industrial Internet Co.Ltd(601138) ‘s cash assets continued to increase. At the end of 2018, the company’s monetary capital balance was 62.29 billion yuan. By the end of last year, it had increased to 82.87 billion yuan, accounting for nearly one third of the total assets of 266.6 billion yuan in the same period, far exceeding the amount of short-term loans in the same period.
However, with a huge amount of cash, after Foxconn Industrial Internet Co.Ltd(601138) listing, there is almost no record of investing in financial products and wealth management. According to the annual report from 2018 to 2021, in addition to holding a small amount of hedging, foreign exchange settlement and other hedging financial products, the company does not hold other financial and financial products, and the financial investment income of financial products is not shown in the source of income.
Foxconn Industrial Internet Co.Ltd(601138) , with more money and less debt pressure, has also tried to buy financial management before. The company disclosed in August last year that the company and its subsidiaries planned to use up to 41.5 billion yuan of idle self owned funds for financial products and structured deposits issued by investment banks, bank financial subsidiaries and other financial institutions. After the disclosure of the financial plan, the company has not been put into action.
Foxconn Industrial Internet Co.Ltd(601138) the latest financial investment scale has increased significantly compared with last year. However, since this year, the bank’s financial management has broken the net in a large area. Whether the company will make a move under such circumstances still needs to be observed.
performance growth slows down and share price drops
Foxconn Industrial Internet Co.Ltd(601138) march 22 also disclosed that it plans to distribute a cash dividend of 5 yuan to all shareholders of 10 shares, with a total dividend of 9.92 billion yuan. Compared with 4.97 billion yuan last year, the amount of dividends more than doubled year-on-year.
Behind the huge cash dividends, the performance of Foxconn Industrial Internet Co.Ltd(601138) last year continued to grow rapidly. According to the data of the annual report, in 2021, Foxconn Industrial Internet Co.Ltd(601138) operating revenue reached 439557 billion yuan and net profit reached 20.01 billion yuan, both reaching a record high.
Since the second quarter of last year, the net profit of Foxconn Industrial Internet Co.Ltd(601138) has been rising. In the first quarter of last year, the company achieved a revenue of 98.379 yuan. Except for a slight decline in the second quarter, it was more than 100 billion yuan in the third and fourth quarters, reaching 109.3 billion yuan and 134.1 billion yuan. The net profit increased from 3.188 billion yuan in the first quarter to 9.003 billion yuan in the fourth quarter.
At the same time, the overall performance is facing high pressure. In 2012, the company’s main revenue sources were communication and mobile network equipment and cloud computing, with revenue of 258.96 billion yuan and 177.69 billion yuan respectively, with a year-on-year increase of only 1.95% and 1.36%, significantly lower than 3.87% and 7.6% of the previous year. Although the industrial Internet revenue increased by 16.92% year-on-year, the revenue scale was only 1.69 billion yuan, accounting for less than 0.5%.
In this case, the share price of Foxconn Industrial Internet Co.Ltd(601138) has hit a record low. Since April 29 last year, its share price has fallen all the way from 14.56 yuan / share to a record low (9.42 yuan / share) on March 16 this year, with a cumulative decline of more than 35%. On March 23, its closing price was 10.39 yuan / share, which was still close to 60% lower than the high point at the beginning of listing (25.78 yuan / share).
In the face of falling share prices, Foxconn Industrial Internet Co.Ltd(601138) launched a repurchase plan. The company disclosed in October last year that it plans to use 1 billion yuan to 1.5 billion yuan to repurchase up to 835655 million shares at a price of no more than 17.95 yuan / share. As of February 28 this year, a total of 27.77 million shares have been repurchased, with a repurchase price of 11.01 yuan to 11.60 yuan / share and a total repurchase amount of 314 million yuan.
However, repo did not stop the decline. On March 23, the company announced again that it plans to speed up the repurchase in the next three months. It is expected that the repurchase amount will not be less than 500 million yuan, and the cumulative total repurchase amount will not be less than 800 million yuan.
For Foxconn Industrial Internet Co.Ltd(601138) , it is not empty talk to improve the efficiency of capital use and increase the company’s income against the background of the slowdown in the growth of main business income Opple Lighting Co.Ltd(603515) disclosed that from July to September last year, the company recovered 7.78 billion yuan of financial principal and obtained 20.41 million yuan of income. From October to December, the principal was recovered by 6.39 billion yuan and the income was 16.32 million yuan. In 2020, the trading financial products held by the company obtained a profit of 96.87 million yuan and an uncollected balance of nearly 4.6 billion yuan, which is far lower than the planned investment scale of Foxconn Industrial Internet Co.Ltd(601138) .
