Mon, Aug 19, 2013 - Page 14 News List

PRC retail chain Buynow plans IPO in Taiwan

BRANCHING OUT:A brokerage said the retail chain intends to transform its stores into integrated services providers that will also serve as shopping malls

Staff writer, with CNA

Taiwanese contract notebook computer maker Clevo Co (藍天電腦) said on Saturday that its China-based retail chain Buynow (百腦匯) is planning to launch an initial public offering (IPO) in Taiwan.

As Buynow — a 3C (computer, communications and consumer electronics) product retail operator in China — owns a substantial amount of property, an alternative source of funds would be to issue real-estate investment trusts, a derivative which repackages property assets into securities.

Clevo said Buynow is scheduled to finalize its fund-raising plan in the fourth quarter of the year.

Buynow was founded in China in 1998 and has opened 22 stores in more than 10 cities, including Shanghai, Beijing, Hangzhou, Chongqing, Qingdao, Chengzhou and Xiamen.

An additional 17 Buynow stores are planned, with three scheduled to open in Huizhou, Wuhan and Suzhou in the second half of the year, Clevo said.

The number of Buynow outlets is expected to exceed 30 by the end of 2015, the computer maker said.

Market analysts said the profitable Buynow chain has become Clevo’s major income source.

In the second quarter, Buynow posted NT$322 million (US$10.7 million) in net profit, up 130 percent from the first quarter.

The 3C product retail chain made up 62 percent of Clevo’s net income in the April-June period.

In the first six months, Buynow registered NT$463 million in net profit, up 33 percent from a year earlier.

HSBC Securities said in a research note that the brokerage expects Buynow to open six new stores this year and next year, a move that is expected to raise the total floor area of the retail chain’s outlets by 30 percent.

The brokerage said Buynow will transform its stores into integrated services providers that will not only sell 3C products, but will also serve as shopping malls to provide a wider range of goods.

On the back of Buynow’s contribution, Clevo’s earnings per share for this year, next year and 2015 are expected to stand at NT$4.4, NT$4.5 and NT$4.6 respectively, compared with NT$2.2 recorded last year.

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