Skyworth Digital Holdings Ltd.(IPO Fact Sheet) (March 17, 2000)

TUNG TAI SECURITIES COMPANY LIMITED

 

SKYWORTH DIGITAL HOLDINGS LIMITED (IPO FACT SHEET)

 
 

Listing Information

 
 

Skyworth, a manufacturer of colour TV, digital audio-visual and internet network products in the PRC, is underpinning its listing plan on the main board of the Hong Kong Stocks Exchange. The following is for potential investor's information only and subject to alterations.

 
 

New shares to be issued

500m

 
 

- Institutional and private placement

450m

 
 

- IPO

50m

 
 

Issued price

HK$1.84-$2.3

 
 

Capital to be raised

approximately HK$1b

 
 

Estimated PE for 2000

8-10 Times

 
 

Net operation earning forecast for 2000

300m

 
 

Major shareholder post IPO

   
 

- Family Trust of Mr. Wong (Chairman of the Group)

40.84%

 
 

Stock Code

751

 
 

Sponsors and Underwriters

   
 

Global coordinator and Bookrunner

ING Barings

 
 

Joint Sponsors

ICEA Capital Ltd

 
 

Time Table

   
 

IPO application close

24 March 2000

 
 

Expected date of listing

7 April 2000

 
 

Company Background

   
 

The history and development of the group may be divided into four main stages:

- Mr. Wong established Skyworth Industrial in Hong Kong to engage in trading, exporting and R&D of electronic products, TV sets in OEM format in 1988.

- From 1992, the Group started to produce colour TV sets in the PRC in OEM format for exporting and domestic sales.

- In 1998, the Group commenced production of VCD and SVCD players.

- In 1999, production of DVD players and first internet television set-top box commenced.

 
 

Business

 
 

Skyworth is principally engaged in the business of designing, manufacturing and selling colour TV sets and digital audio-visual product in the PRC. In 1999, the Group commenced production and sale of internet and net work communication products.

The Group's turnover percentage by category as follows demonstrates its core production and sales proportion.

 
 

Turnover by category

Year ended 31st March

Seven months

 
 

In percentage

98

99

from March 99

 
 

Colour TV sets

- below 25"

- 25" and above

42.6%

57.1%

36.3%

60.1%

28.9%

65.5%

 
 

Digital A.V. sets

0.1%

3.3%

5.4%

 
 

Internet & network products

nil

nil

5 sets

 
 

Others

0.2%

0.3%

0.2%

 
   

100%

100%

100%

 
 

Domestic sales and export

Year ended 31st March

Seven months

 
   

98

99

from March 99

 
 

PRC sales

84.6%

87.4%

86.8%

 
 

Export sales

15.4%

12.6%

13.2%

 
   

100%

100%

100%

 
 

Overall Advantage and Risk Associated with the group

 
 

The Group will continuously invest in R&D in order to develop new product at low costs as to maintain its competitiveness.

Advantages of the Group are as follows:

- Ability to capture the internet market by using TV set as online browser.

- To develop the new TV set-top box Web2001 and later Web2008 which enable TV to function as a computer for online purposes and thus market potential is huge

- To cooperate with Microsoft China to develop the set top box technology which will be a new pioneer product in its kind

 
 

Risks can be summarized as below:

 
 

- Intense competition in sales market of TV and Audio-Visual sets

- TV set top box still in R & D stage and its marketability is yet to be proved

- Rapid technology change in its products

- Heavy reliance on the PRC market

- Reliance on limited suppliers for key components of its products

 
 

Future Plans and Use of Proceeds

 
 

The management envisages an increasingly strong demand for its product in the PRC market and determined to become a market leader in the industry. Accordingly it has the following strategy in its operation.

- Diversify its product types

- Devote more resources in R & D

- Strengthen its sales and distribution network by setting up more outlets

- Strengthen its production facilities by increasing efficiency and capacities

 
 

Utilization of around 1b proceeds as follows:

 
 

- 200m to expand and upgrade further the Group's production and sales operation for colour TV set.

- 100m for same purpose for digital audio-visual products

- 100m to develop Internet and network communication products

- 250m to strengthen R & D capabilities by setting up a permanent center

- Balance for general working capital

 
 

Historical P/L for reference

 
         

Seven months

From March 1999

 
 

Year to 31st March (HK$m)

1997

1998

1999

   
 

Turnover

1,576

2,274

3,009

2,019

 
 

Change in %

N/A

44

32

   
 

Net profit

159

200

240

184

 
 

Change in %

N/A

25

20

   
 

EPS(cents)

13.2

16.7

20.1

13.44

 
 

Change in %

N/A

26

20

   





Research Home Page


If you would like to know more about a specific stock, you can ask us by emailing:Mr Kenny Tang.

This circular is for information only. The information and opinion presented are believed to be accurate but are not guaranteed and without legal responsibility. Neither the information, nor any opinion expressed, constitutes a solicitation by us of the purchase or sale of any securities or futures contract, or options thereon.