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Decorative light maker Neo-Neon to issue US$63m TDR

Neo-Neon Holdings Ltd (真明麗控股), a decorative light manufacturer founded by a Taiwanese businessman in Guangdong, plans to raise US$63 million by issuing Taiwan Depositary Receipts (TDR) before the end of the year, its underwriter Fubon Securities Co (富邦證券) said yesterday.

“About 140 million units of TDRs will be issued, with each unit representing half of the company’s common share,” Fubon Financial Holding Co (富邦金控) senior vice president Chen En-kuang (陳恩光) said by telephone, adding that it would be “lower the threshold for both institutional and retail investors.”

The pricing for Neo-Neon’s TDR will be finalized next month in accordance with its share price in Hong Kong, he said.

Shares of the company in Hong Kong yesterday closed down 0.53 percent at HK$5.61 (US$0.72) per share.

The world’s largest manufacturer of decorative lighting products, Neo-Neon accounts for about 50 percent of the market, Fubon said.

It is a major producer of high-tech light-emitting diode (LED) decorative illumination products worldwide, the company said in its Web site.

Aided by its investment in research and development since 1996, the company started mass producing LED decorative lights in 2002. The company employs more than 25,000 employees, including 300 engineers.

To beef up its investment in LED lighting products, US$50 million of the capital raised from the TDR will be used to expand upstream into the production of LED chips, Chen said.

Neo-Neon has secured orders for home decorative lighting products from Home Depot, a major US retailer of home improvement, construction materials and services, the securities brokerage firm said in a press statement.

The company has also won a bid by the city government of Heshan in Guangdong Province to overhaul the street lighting system in 10 Chinese cities over three years. The company has secured an order for 10,000 LED lamps for Heshan City and another order for 20,000 lamps from Jiangmen City in Guangdong, it added.

In August, the China Environment Fund invested US$30 million for an 11.27 percent stake in Neo-Neon, underlining the company’s growing prospects in the Chinese LED market, Fubon said.

Given its dominance in the Chinese market, the company does not rule out seeking strategic partners to tap into the supply chains for LED backlighting products, Fubon said.

Earlier last month, Neo-Neon inked an investment agreement with the management committee of the Economic and Technology Development Zone in Yangzhou, which agreed to grant 300 million yuan (US$44 million) to fund the establishment of a new factory and a guarantee of a minimum 35 million yuan in future orders, Fubon said.
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