TCL unveils plan to privatise its Hong Kong-listed smartphone business
Move is the latest example of a mainland Chinese company seeking to delist from the Hong Kong bourse
Shenzhen-listed electronic product manufacturer TCL Corporation announced Monday plans to privatise TCL Communication Technology Holding, its Hong Kong-listed smartphone business, in the latest case of a mainland company seeking to delist from the Hong Kong bourse.
The goal of the privatisation was to “maximise the interest of the shareholders and optimise the company’s business structure,” TCL Corporation said in a Chinese-language announcement to the Shenzhen Stock Exchange.
After the transaction, TCL Communication will be a wholly-owned subsidiary of TCL Corporation and be delisted from Hong Kong, the filing said, without disclosing the offer price for the privatisation.
TCL Corporation controls a 65.23 per cent stake of TCL Communication through a wholly-owned subsidiary, according to the filling.
The proposal is pending the approval of the independent shareholders of TCL Communication, as well as regulators in Hong Kong, the filing said.
The move comes after Hong Kong-listed Dalian Wanda Commercial Properties announced in April its plan to privatise and relist on the mainland. Peak Sport Products, one of China’s largest sports goods manufacturers, said two weeks ago that its controlling shareholder was considering a buyout plan and may delist from the Hong Kong bourse.
The valuation of TCL Communication, with an 8 to 9 times price-to-earnings (PE) ratio, is quite “reasonable” compared with its peers in the Hong Kong market given that the firm’s profitability has been under pressure, said GF Securities Hong Kong Brokerage analyst Joseph Ho.