Digital China Holdings Ltd (神州數碼), China’s largest IT retailer and services provider, is set to list on the main bourse in Taipei today by issuing Taiwan depositary receipts (TDR) to fund its expansion into China.
The company would offer up to 260 million TDRs at a subscription price of NT$30.20 apiece, with each TDR representing 0.5 common shares of Hong Kong-listed Digital China.
The initial public offering, valued at NT$7.85 billion (US$258 million), is the largest TDR for the year, according to underwriter KGI Securities Co (凱基證券).
Digital China chairman and chief executive Guo Wei (郭為) told a pre-TDR briefing yesterday in Taipei that the company aims to forge a closer partnership with Taiwanese firms, including Acer Inc (宏碁), Asustek Computer Inc (華碩) and HTC Corp (宏達電).
“We are tapping into the capital markets in the Greater China region, especially in Taiwan, where investors are savvier in tech stocks than their Hong Kong peers,” Guo said.
Digital China is an IT products retailing arm spun off from Lenovo Group Ltd (聯想), China’s largest and the world’s fourth-largest PC brand, as of 2000. It has diversified into a provider of IT solutions to governments as well as the telecoms and finance sectors.
Morgan Stanley said in a report on Nov. 11 that it expected Digital China to benefit from growing consumer demand in China’s tier-four to tier-six cities as well as from China’s corporate IT growth. The company currently has 572 retail outlets in rural cities, up from 502 stores in the second quarter.
Morgan Stanley expected the retailer’s IT services business to be driven by its “digital city” project, as well as demand from village banks for core-banking solutions, in which Guo said it could tailor-make solutions for smaller lenders at a much lower cost.
Digital China is currently in talks with 47 Chinese cities and has formed a strategic partnership with more than 130 international firms including IBM Corp, Cisco Systems Inc and Hewlett-Packard Co to bid for future municipal government projects.
These firms will join hands in providing tech solutions for government use, including the much-touted “digital citizen cards,” which would include personal information such as social security and medical insurance details.
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said second-quarter revenue is expected to surpass the first quarter, which rose 30 percent year-on-year to NT$118.92 billion (US$3.71 billion). Revenue this quarter is likely to grow, as US clients have front-loaded orders ahead of US President Donald Trump’s planned tariffs on Taiwanese goods, Delta chairman Ping Cheng (鄭平) said at an earnings conference in Taipei, referring to the 90-day pause in tariff implementation Trump announced on April 9. While situations in the third and fourth quarters remain unclear, “We will not halt our long-term deployments and do not plan to
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
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