Phone-maker to list on Nasdaq
CEC Telecom hopes to raise US$150m from offer to fund 3G handset research
CEC Telecom, the mobile-phone manufacturing subsidiary of Nasdaq-listed consumer electronics firm Qiao Xing Universal, plans to seek a listing on the same board to raise US$150 million by the fourth quarter of this year.
CEC chairman Wu Zhiyang yesterday said the company had received US$60 million from private equity funds and it would soon make a decision on the share sale's underwriter.
'The proceeds raised from the initial public offering would be used for research and development of [third-generation] handsets,' the company said.
Earlier this year, Qiao Xing cited an independent market research company as saying its 'CECT' branded mobile-phones ranked within the top five local brands in the mainland by market share. It said the brand had moved up 18 places but did not provide the actual ranking.
In November last year, Qiao Xing said CEC had an unaudited gross profit of US$24.6 million for the first nine months of last year, up 91 per cent from a year earlier.
Qiao Xing first bought 65 per cent of CEC, partly from China Electronics Corp, in March 2002 for 316 million yuan, then 25 per cent in May 2004 and the remaining 10 per cent at the end of last year. The firm did not reveal the investment costs of the subsequent 35 per cent stake.
CEC competes with other mainland brands such as TCL, Konka and Ningbo Bird for a share of the country's handset market, which already saw 22.38 million units sold for the first three months of this year.
Low-cost handsets as cheap as Euro45 ($446) to be introduced by top-tier international brands such as Nokia and Motorola specifically targeting the mainland's rural markets are expected to pose further threats to domestic handset makers, whose capabilities in research, development and design are inferior to those of the leading foreign brands.