China Techfaith Wireless Communication Technology Seeks to Raise $125-150 Million in NASDAQ Listing

Strategic Insights -

Chinese mobile-phone design house China Techfaith Wireless Communication Technology is preparing for an initial public offering (IPO) on Nasdaq, aiming to raise between $125 million and $150 million early next month. Founded in 2002 by a group of former Motorola engineers, Techfaith is the largest independent handset designer in mainland China. The company has established partnerships with international firms, including NEC, Alcatel, and Lenovo, and has also set up a joint venture with NEC to develop 3G phones.

Key Takeaways:

  • China Techfaith Wireless Communication Technology, the largest independent handset designer in mainland China, plans to raise $125-150 million in an IPO on Nasdaq next month.
  • The company was founded in 2002 by a group of former Motorola engineers and has established partnerships with international firms such as NEC, Alcatel, and Lenovo.
  • Techfaith has set up a joint venture with NEC to develop 3G phones and designs handsets for domestic and international companies.
  • The mainland market is becoming increasingly competitive, with more vendors passing regulatory qualifications to manufacture mobile phones.
  • Vendors are outsourcing design work to stay competitive, with the life cycle of a new handset decreasing to 12 months from 3-5 years previously.
  • Techfaith's net profit rose to $18.24 million last year from $4.95 million the previous year, with expectations to more than double this year.
  • The company will sell about 20% of its enlarged share capital, valuing the company at between 34 and 41 times last year's earnings.
  • Seventy percent of the shares are new, while 30% will be sold by existing shareholders.

Statistics:

  • China Techfaith Wireless Communication Technology aims to raise between $125 million and $150 million in its IPO.
  • Last year, the company's net profit rose to $18.24 million from $4.95 million the previous year.
  • The company expects to more than double its net profit this year.
  • The IPO will involve selling about 20% of the company's enlarged share capital, valuing the company at between 34 and 41 times last year's earnings.
  • The company will sell 70% new shares and 30% shares held by existing shareholders.

Sources:

  • "China Techfaith ready for Nasdaq listing" - The Korea Times, April 15, 2007 (Note: The article does not specify the date, but it is mentioned as April in the text.)
  • "Techfaith puts dual-track life on hold" - China Daily, January 5, 2007
  • "China Techfaith may raise $150m in Nasdaq listing" - China Daily, April 10, 2007
  • BDA China, a telecommunications research and consulting firm, quoted in the article.