Alltronic eyes US clients with listing
Firm hopes to raise up to $70 million for expansion and equipment purchases
Alltronic Holdings, a Hong Kong manufacturer of home electronic products, is hoping to attract large US clients when it lists on the main board next month, according to its chairman Lam Yin-kee.
Market sources say the firm hopes to raise $60 million to $70 million from the initial public offering.
Alltronic manufactures electronic products such as air purifiers and water sprinkler controllers.
Mr Lam said Alltronic's main motivation for listing was to win manufacturing contracts for large US firms. He recalled how he failed to win over a large American firm as a customer in 2002.
'When they came to my company, they told me: 'Your turnover is only a few hundred million Hong Kong dollars. When we give you orders, how can you guarantee your company has no financial problems and can deliver the goods?'' he said.
'Later, the US company told us we were too small and they preferred suppliers with strong financial backing. So we need to be listed to prove we are in good financial condition. If we are a listed company, it is easier to get financing from banks.'
At the end of last year, Alltronic's cash on hand was $20 million, roughly equal to its bank borrowings, said financial controller Roger Leung. Last year, its turnover was nearly $300 million, said Mr Leung, adding that the firm had been in the black and growing its profits since 1997.
Mr Lam said Alltronic planned to use funds from its initial public offering to expand production and buy new equipment. It will buy several surface mount technology machines at more than $2 million each, to mount small components on to printed circuit boards.
Alltronics has two factories in Shenzhen with more than 1,200 workers and 50 engineers in Hong Kong, Shanghai and Shenzhen. It derives 70 per cent of sales from the US and the rest from Europe, Japan, Australia and Singapore.
