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SCMP Reporter

BOE Technology Group hopes to float its South Korean thin-film transistor liquid-crystal display (TFT-LCD) unit on the Hong Kong main board as early as the second quarter to help finance a US$1.2 billion Beijing plant.

The listing will further raise the Beijing-based electronics component maker's international profile after its widely publicised acquisition of the display subsidiary from the ailing South Korean chipmaker, Hynix Semiconductor, last year.

HSBC would sponsor BOE-Hydis Technology's listing, sources said.

BOE shareholders will vote on March 30 on a resolution to grant the  board full authority to arrange the wholly owned  unit's overseas initial public offering.

With yuan-denominated A and foreign-currency B shares listed on the Shenzhen Stock Exchange,  the former state enterprise  was privatised by its management in 1993.

Its US$380 million acquisition of Hyundai Display Technology (Hydis)  was billed at the time as the biggest foreign  purchase by a Chinese technology company.

Analysts  said it was a prime example of the growing trend of mainland firms engaged in cross-border mergers and acquisitions for foreign technology to help compete in the domestic market.

The first phase of BOE's Beijing plant, scheduled for completion by the end of the year, would be capable of making 6.9 million fifth-generation TFT-LCD displays annually using Hydis' technology, BOE board secretary Zhong Huifeng said.

Demand for TFT-LCD displays is brisk in China.  Foreign makers Samsung and LG Philips have set up TFT-LCD manufacturing facilities in the country, but large-scale production has yet to begin, according to analysts.

However, price competition is expected to heat up with the completion of Panasonic's mainland plant this year.

'BOE is the first domestic producer to have exposure to the large TFT-LCD panel market,' a BOC International report said yesterday. 'But we believe it is not competitive against top-tier suppliers in terms of costs and product mix.

'We are concerned over whether it can secure funding for the project, given its highly leveraged balance sheet and the fact it has already tapped the equity market.' BOE had a gearing ratio of 48 per cent in June last year.

Last month, it placed HK$2 billion worth of B shares to investors to fund TFT-LCD capacity expansion and repay bank loans taken to finance the Hydis acquisition.

debut timeline

BOE hopes to float the unit as early as the second quarter

HSBC will sponsor the listing of BOE-Hydis Technology

March 30 vote to decide board's authority to arrange offer



BOE counts on Korean unit's listing to finance Beijing plant