TencentLuo Fei, author of "front-line" news, is from Hong Kong.
At present, the IPO market in Hong Kong is very lively, except for those with a huge amount of capital raised.AlibabaIt will soon be listed in Hong Kong, and many companies with a smaller market capitalization will be listed in Hong Kong.
On November 13th, HomeControl, a remote control design and production company, willHKExListed on the market.
According to the prospectus, HomeControl sold 125 million shares in Hong Kong, pricing each at the lower end of the range price of HK $1.02 each, raising a total of HK $127.5 million, with a market capitalization of about HK $500m.
Tencent News "Front Line" learned that the institutional investors of Homecontrol are mainly industrial companies in the upstream and downstream of the manufacturing industry. Among them, Duan Yongji, chairman of Sitong holding Company, which is known as the "godfather of the Internet," subscribed more than 10 million Hong Kong dollars in his personal capacity.
According to public data, Homecontrol mainly provides remote control design and production for customers such as multi-system operators (MSO), Internet transport (OTT) or TV brands, with a market share of 9.2%, ranking second in the industry.
Homecontrol has acquired more than 100 customers in more than 40 countries in the past 25 years, including mainland customersmilletAnd Hisense.
Xiao Guoxiong, head of marketing and innovation at Homecontrol, told Tencent News that Homecontrol has been a supplier of XIAOMI remote controls since 2018. Although XIAOMI did not release specific data from his remote control supplier, according to data provided by Xiao Guoxiong, Homecontrol accounted for about 40% of XIAOMI's remote control shipments.
According to the prospectus, Homecontrol's 2018 revenue was $174 million, of which Europe accounted for 49.8% and Asia accounted for 18.2%. Xiao Guoxiong told Tencent News "first Line" that the share of revenue in Asia has increased a lot in 2019, although there are still two months of financial data to be observed, and growth in the Asia-Pacific region is expected to double this year, including the mainland Chinese market and the Indian market.
Homecontrol's net profit has continued to grow over the past three years, with a net profit of $5.57 million in 2018. A manufacturing analyst told Tencent News Line that its 2020 net profit is expected to be $9.5 million, which means Homecontrol's current PE is 6.8x, which is underpriced.
With regard to the reasons for the low pricing, the listing team of Homecontrol explained to Tencent News that this is because the low pricing gives profit to investors, hoping that investors can hold it for a long time and grow together in the future.
Homecontrol's management team is less sensitive to low pricing. This is because it is more important for them to complete the listing than the amount of capital raised.
Xiao Guoxiong told Tencent News "first Line" that Homecontrol was already in talks with some potential acquisition targets. These targets are domestic companies on the new third board or gem, and the Homecontrol management team hopes to be able to carry out M & An activities on the listing platform. This is also the main purpose of the Homecontrol management team's decision to list in Hong Kong at this time. Xiao Guoxiong did not disclose the specific targets for purchase.
According to the prospectus, 28.9% of the fund raised by Homecontrol will be used for future strategic investments, or the acquisition of OTT systems andSmart homeA company or business in security products.
Homecontrol is relatively light on assets compared to its asset-heavy manufacturing peers. According to public data, Homecontrol does not actually have a factory that produces remote controls, and it has outsourced production, only involving product design and raw material procurement.
This means that Homecontrol also has far fewer employees than its peers. Like all its peers, Homecontrol's previous remote control production was completed in China, and Homecontrol moved its production to Cambodia in the past two years. In Xiao Guoxiong's words, the rapid transfer is due to the light asset model, which only needs to find a suitable factory in Cambodia and start work immediately.
The controlling shareholder of Homecontrol is the Dutch company HNPEA, and after penetrating upward, it isMorgan StanleyNHPEA L.P, a private equity fund managed, did not disclose any natural person shareholders in the prospectus.