TCL Communication Technology Holdings Ltd (TCL通訊), a handset unit of Chinese consumer electronics giant TCL Corp, yesterday said it plans to sell about 109 million shares in the form of Taiwan Depositary Receipts (TDR) later this year to raise funds for future capacity expansion.
The share offering is about 10 percent of its existing share capital, while the firm’s board approved the sale of a maximum of 217 million shares in December.
“We do not intend to sell as much as the 20 percent [of share capital] that the board approved,” chief executive George Guo (郭愛平) told a press briefing in Taipei.
TCL Communication has not set a timetable for the TDR issue, but Guo said the firm hoped that the TDRs would start trading as soon as possible. The handset maker has hired Yuanta Securities Co (元大證券) to help it underwrite the issue.
TCL Communication, headquartered in Shenzhen, China, seized seventh position in the global mobile phone market with a market share of 3 percent last year, just behind Blackberry phone maker Research In Motion and Apple Inc according to iSuppli data.
TCL Communication, whose shares trade on the Hong Kong stock market, said it planned to use most of the proceedings of the issue to buy equipment to boost capacity to cope with growing demand for its mobile phones.
This year, the company plans to boost annual capacity to 60 million units, compared with 40 million units last year, and it plans to increase that to 130 million units sometime in the future.
Targeting the entry-level and middle-range markets, TCL Communication expects shipments to grow by almost 40 percent to 50 million units this year, including a small portion made up by its new tablet device series.
Last year, the company shipped 36.2 million mobile phones, with half of the phones exported to the US. TCL Communication also makes mobile phones for other companies, including European telecoms carrier Vodafone, some Chinese handset retailers and even the world’s top five mobile phone brands.
Rising demand in Europe, Latin America, Brazil and, in particular, China would be the major driving forces, chief financial executive Thomas Liu (廖旭東) said.
In China, like in other regions, it is a growing trend for telecoms operators to increase subsidies on smartphone purchases which will help boost TCL Communication’s business, the company said.
TCL Communication said it was supplying a smartphone powered by Google’s Android operating system to China Unicom Ltd (中國聯通) and is also scheduled to start shipping one of its phones to China Mobile Ltd (中國移動) next month.
The Chinese handset maker plans to roll out 100 new handsets this year, a third of which will be smartphones, it said.
Last year, TCL Communication made a profit of HK$702 million (US$90 million), compared with HK$23 million in 2009, according to a financial statement provided by the company.
Revenue doubled to HK$88.7 billion last year, from HK$4.36 billion in 2009.
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