SEHK lists Telefield on Main Board

Telefield is offering 100,000,000 shares worth between HK$1.01 and HK$1.35 per share that commenced on Friday.

Telefield International (Holdings) Limited (“Telefield” or the “Group”) announced the details of its proposed listing on the Main Board of The Stock Exchange of Hong Kong Limited (“SEHK”).

Telefield intends to offer 100,000,000 shares (subject to the exercise of over-allotment option), of which approximately 90% or 90,000,000 placing shares and approximately 10% or 10,000,000 shares for public offer. The indicative offer price range is between HK$1.01 and HK$1.35 per share, according to a Telefield report.

Assuming an offer price of HK$1.18 per share, being the mid-point of the indicative offer price range, and that the over-allotment option is not exercised, net proceeds from the offering would be approximately HK$97,200,000 after deducting the underwriting fees and other estimated expenses.

The placing has begun on 10 January 2011. The public offer is to begin on 14 January 2011 (Friday) and end at noon on 19 January 2011 (Wednesday). The final offer price and allotment results will be announced on 26 January 2011 (Wednesday). Dealing in the shares of Telefield is expected to commence on the Main Board of SEHK on 27 January 2011 (Thursday) under the stock code 01143. Shares are to be traded in board lots of 2,000 shares.
China Merchants Securities (HK) Co., Limited is the Sole Bookrunner and Sole Sponsor.

Mr. Cheng Han Ngok, Steve, Chairman of Telefield, said, “We are very delighted to see the business of the Group take a great leap forward. The listing strengthens our capital base to support our business development in the long term. In a bid to drive sustainable growth of our business, we will continue to actively develop our branded businesses and focus on niche markets with strong potential. Leveraging our extensive sales network in North America and Europe, we will also launch more new products.”

In March 2009, Telefield obtained the licence of the “RCA” brand for the distribution of small and medium business phone (“SMB”) products in North America. Currently, this brand is the second largest SMB phone system in the US retail market, occupying nearly 30% of the market share. In November 2009, the Group further expanded its branded business in Europe by acquiring “TrekStor”, a renowned German brand of multimedia product and portable storage device.

The Group’s branded business added strong momentum boosting its revenue and profit growth. For the first eight months in 2010, revenue from branded business reached around 32% (approximately HK$220,000,000), up from around 17% (approximately HK$140,000,000) in FY2009. In the first eight months in 2010, gross profit margin of this arm was approximately 22%, within which that of the “RCA” operation was more than 32%.

Currently, its customer base includes more than 20 international consumer electronics manufacturers from Japan, the Asia-Pacific region, the US and Europe, including “Pioneer” and “Vasco”. Some of these customers have more than five years long-term relationships with the Group, thereby continuously generating stable revenue. Major customers of the “RCA” licensed brand include office and equipment supplies superstores and various distributors in North America, while those of its “TrekStor” brand include electronics superstores and other retailers mainly in Germany and various countries in Europe.

Its EMS business operates on a vertically integrated operations model and provides one-stop solution covering research & development (R&D), procurement, production, sales, logistics and after-sales service. By liaising with retailers directly, the Group is able to maintain high operational flexibility. This model also allows the Group to have more stringent control of raw materials and assembly, and better manage its production cost, product quality and delivery time. Its automated and semi-automated production facilities and testing equipment in Huizhou and Guangzhou, the PRC, have versatile production lines that can produce consumer electronic products for various EMS customers.

Looking ahead, the Group will continue to enhance the recognition of “RCA” and “TrekStor” in North America and Europe. It will also acquire or license additional brands, while establishing sales offices.

Besides, it will focus on exploring potential markets, in particular niche markets, and developing more new products with higher margins such as medical and car electronics products. The Group will also establish additional overseas sales and marketing team to strengthen its sales and marketing efforts, improve production technologies and devote more resources to R&D including collaboration with customers or tertiary institutes, while also expanding and upgrading its production facilities.

Mr. Cheng concluded, “We have been keeping pace with the market and actively looking for business expansion opportunities since our establishment in 1992. We will continue to realize the synergies generated from our branded business and EMS business and strive to create more growth momentum for our business. We have strong confidence in the Group’s prospects and propose a dividend policy of 30% to 50% of the distributable profit.”