Aluminium listing to raise HK$1.22b in city
PanAsialum plans Hong Kong IPO as the Shenzhen firm's revenue soars on the back of its manufacture of casings for Apple iPads
PanAsialum, a major manufacturer of aluminium casings for Apple's iPad, plans to raise up to HK$1.22 billion from an initial public offering (IPO) in Hong Kong, the Shenzhen-based company said yesterday.
Aluminium parts for various Apple products have increased their share of the firm's portfolio over the past two years. It also produces aluminium door and window frames and other products for architectural uses.
Casings for iPads contributed 47 per cent of the company's revenues last year, up from 8.8 per cent in 2010.
"Our aim is to become the leading supplier of parts for electronics while maintaining a diversified line of products," chairman and chief executive Marcus Pan said.
Revenue in the fiscal year to September 30 reached HK$2.44 billion, compared with HK$2.09 billion the previous year.
Financial controller Yeung Chin-cheung said: "The robust growth in revenue is due to the fast growth in the electronics parts segment."
PanAsialum sells the casings to Taiwan-based Foxconn, the largest contract manufacturer for Apple products.
It established a business relationship with Foxconn in 2000 and is now the sole external supplier of unibody casings. It also supplies aluminium plates to Foxconn that are processed into parts for tablets and computers.
PanAsialum said it derived 34 per cent of its total revenue from sales to Foxconn.
Demand for tablet computers is expected to keep growing quickly for the next couple of years. Research firm IDC says in its latest forecasts that worldwide shipments of tablets will reach 172.4 million units this year and that by 2016 the number should reach 282.7 million.
PanAsialum is offering 300 million shares at a price between HK$3.46 and HK$4.50 that is expected to be fixed on January 29. The trading debut is scheduled for February 5.
Three-quarters of the proceeds will be used to expand capacity, to establish a new production line and relocate the main plant to a new site in Guangzhou. The remainder will be used for working capital and to repay bank loans.
PanAsialum's IPO comes as investors in the Hong Kong market show signs of recovering their appetite for stocks. The benchmark Hang Seng Index has gained 4.42 per cent this year, closing at 23,659 yesterday.
State-owned insurer PICC has risen 34.2 per cent since its debut last month, closing at HK$4.67.
Simon Lam Ka-hang, research director at Christfund Securities, said the IPO should do well in the short term, as market sentiment was strong.
Encouraged by the stock market rebound, a string of overseas companies, including Japanese casual clothing brand Uniqlo, had been taking initial steps towards a Hong Kong IPO, people familiar with the situation said.
Other Japanese firms with an interest in going public in Hong Kong include Brand Off - a trader in second-hand handbags - and two other pachinko operators that would like to follow in the footsteps of recently listed Dynam Japan.
Other companies in Asia, Africa and Australia, in industries ranging from mining and oil to vehicles and cultural products, are also said to have plans for an IPO in Hong Kong.