China All Access plans HK$500m offering

PUBLISHED : Wednesday, 26 August, 2009, 12:00am
UPDATED : Wednesday, 26 August, 2009, 12:00am

China All Access (Holdings), a mainland satellite and communication appliance manufacturer, plans to raise as much as HK$500 million in a Hong Kong initial public offering next month to fund expansion.

The listing candidate, based in Hebei province, hopes to sell shares with a valuation of 18 times earnings this year and 12 times next year's earnings.

The management roadshow is scheduled to start tomorrow and will open for local investors from September 3. Formal trading is scheduled for September 15 or 16, one source said.

Guotai Junan (Hong Kong) is the sponsor and bookrunner of the deal.

Renowned hedge fund house Atlantis Investment and fund manager FMG own a 13.8 per cent stake in the firm. Their stake will be diluted to a combined 10.4 per cent after selling 25 per cent of the new shares to public investors in the global offering.

Proceeds will be used for production expansion, product development, extension of its sales network and research and development.

The firm produces satellite communication and wireless data communication products and call-centre application solutions and services.

It reported 41 per cent earnings growth to 69 million yuan (HK$78.27 million) last year, while Guotai Junan expected the firm to report a 48 per cent rise in net profit to 101 million yuan this year, given a larger customer base and expanded coverage.

The company earned 7 million yuan in the first five months. However, a person close to the deal said the company would secure a number of profitable government contracts in the second half.

'It is usual practice for the local government to place bulk orders in the late third quarter, thus the company always earns more in the second half than the first,' said the person, adding 70 per cent of last year's revenue came from the government.

Satellite products accounted for 64 per cent of last year's sales, while wireless data products contributed 34 per cent and call centres 2 per cent.