New funding for electronics firm on the rise
PCH International, a logistics and electronic-products development company which has its operations headquarters in Shenzhen, has received US$30 million in funding from a raft of companies including Temesek Holdings, the Singapore government's investment vehicle.
Market sources say PCH, which makes accessories for eReaders, smartphones and tablets, is set to launch an initial public offering in Hong Kong later this year.
Liam Casey, the firm's chief executive, declined to comment on plans for the IPO. But he said the latest round of venture capital funding had come from Northbrooks Investments,an indirect subsidiary of Temasek, J Christopher Burch, a US-based venture capitalist and entrepreneur, and four existing investors. These include Fung Capital, the private finance arm of William Fung Kwok-lun and Victor Fung Kwok-king, which contributed US$4 million.
The latest round of financing was confirmed by Casey about two months after the firm reported a surge in net profit and revenue for last year. The firm said net profit soared to US$14 million last year, from just US$400,000 a year earlier, while revenues soared 170 per cent to US$413 million against US$152 million in 2009.
Asked how large the company could grow, Casey said: 'I would never put a limit on it. The opportunity for us to scale is huge.'
He pointed out that products such as smartphones and tablets did not exist five years ago, while the scope for further product development was almost limitless.
Casey said PCH International was unique in the range of operations it carried out, being responsible for the manufacture of accessories, such as earphones and other support products, for eReaders and tablets. The company also arranged the configuration and packaging of those accessories, while acting as a supply chain and logistics company by shipping products direct to customers.
He refused to identify the electronics companies PCH worked for.
The company actively uses about 100 independently owned factories, all located in Shenzhen, but has an in-house product development team to work on future designs. Consignments are shipped via Hong Kong International Airport because of its more efficient customs clearance and air links.
Casey said using privately owned factories, where the owner is invariably on site, meant PCH was better able to control quality. It meant dealing with people who have an interest in making a success of their business. PCH can also ship direct from factory to consumer, negating the need for distribution centres, warehouses and maintaining huge inventories.
'We completely take the risk out of the supply chain,' Casey said.
Despite having its headquarters in Dublin, Ireland, Casey said the main focus had been on the US consumer market. However, the firm is in talks to widen its coverage in Europe.
