Digital China Holdings, the mainland's largest distributor of information-technology products, has set its medium-term sights on a separate listing for its IT services unit, Digital China Information Technology Service (DCITS). Before the proposed spin-off on the mainland - which is not likely to happen until 2012 - the unit has taken on two key investors in deals that may be be wrapped up shortly. 'DCITS probably will complete the sale of a 23.25 per cent stake to China Singapore Suzhou Industrial Park Ventures (CSVC) and Infinity I-China Investments by the end of this year,' said Wycee Liu Yuqing, general manager of Digital China's corporate communications and planning division. 'It will then aim for an initial public offering before June 2012.' Ms Liu said the company also planned to transfer 19.51 per cent of its stake in DCITS to the joint venture's management team as incentives. On July 3, Digital China said it would inject 500 million yuan (HK$571.8 million), including its IT services business, into DCITS, while CSVC and Infinity Investments would inject another 500 million yuan into the joint venture. DCITS would be valued at 2.15 billion yuan after the deal, said Ms Liu. 'Israel-related Infinity Investments will transfer its security technologies to the joint venture, such as a closed-circuit television system for use in airport terminals,' she said. Last month, the company reported 38.7 per cent growth in sales to HK$35.2 billion for the year to March, partly boosted by yuan appreciation. Net profit rose 92.8 per cent to HK$400.9 million, compared with HK$201.3 million a year earlier. Revenue from IT services, which accounted for 13 per cent of total sales, rose 38.4 per cent to HK$4.62 billion. The segment turned a profit of HK$47 million from a previous loss of HK$24.4 million. Ms Liu said the firm's customer base in IT services was set to grow to 10 mainland banks from six.
