StrongLED Lighting Systems (Cayman) Co Ltd (大峽谷半導體照明) yesterday said its shareholders have approved a plan to list the shares of a Chinese subsidiary on the Shenzhen Stock Exchange, the latest in a series of local companies seeking a Chinese debut.
“Canyon LED Lighting Systems (Suzhou) Co’s (大峽谷供電科技蘇州) initial public offering [IPO] in China would help expand StrongLED’s businesses in China and would also help attract Chinese talent,” StrongLED chairman James Chang (張家瑞) said in an annual report.
The company plans to use the proceeds of the IPO to fund purchases of automation systems, which would improve its productivity and profitability, the report said.
StrongLED, which won the LED lighting project for Shanghai’s iconic Shanghai Pearl Tower skyscraper, primarily provides LED lighting systems and solutions for the exterior of buildings, public squares and shopping malls.
Benefiting from growing external wall lighting demand in China, StrongLED expects revenue this year to be higher than last year’s NT$1.42 billion (US$47.55 million), Chang said.
StrongLED plans to submit an application to the China Securities Regulatory Commission for the IPO by the first quarter of next year, Chang said.
Canyon LED Lighting Systems (Suzhou) is expected to list its shares in 2020, as Taiwanese companies have been given preferential status for listing their shares in China in a series of measures unveiled by Beijing, the Chinese-language Liberty Times (sister publication of the Taipei Times) reported yesterday.
About 100 companies are waiting to get an IPO on the Shengzhen Stock Exchange approved, but only a few are Taiwanese, Chang said.
StrongLED’s stake in the subsidiary would be reduced from 97 percent to about 72 percent following the IPO, it said.
Zhen Ding Technology Holding Ltd (臻鼎), Namchow Holdings Co Ltd (南僑投資控股) and Long Chen Paper Co Ltd (榮成) have also recently unveiled plans for their China-based subsidiaries to go public, while Hon Hai Precision Industry Co (鴻海精密) Chinese subsidiary Foxconn Industrial Internet Co (FII, 富士康工業互聯網) is soon to be listed on the Shanghai Stock Exchange.
FII’s IPO, which is seeking to raise US$4.2 billion, has raised concerns in Taiwan about China’s “magnetic pull” as Chinese investors are willing to pay a higher valuation.
About 16 local companies are pondering following suit, the Taiwan Stock Exchange said.
StrongLED posted a net profit of NT$133 million last year, more than double the NT$63.56 million it posted in 2016.
Shareholders yesterday also approved the distribution of a cash dividend of NT$1 per common share.
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