CDH-backed Certusnet files for HK IPO
Certusnet, a China-based developer of telecommunication software backed by CDH Investments, has filed for an IPO in Hong Kong.
Certusnet creates software used in data centers and communication networks, along with enterprise support services, with a focus on cloud data storage and management, network access. The company has a diverse customer base that includes China’s big three telecom operators, online broadcasters, government entities, and businesses, to which it provides customized solutions such as ongoing technical support and maintenance.
Proceeds from the IPO will be used to strengthen Certusnet’s research and development capabilities, according to the prospectus. Currently, the 512-strong R&D team comprises more than half of the company’s total employees.
Certusnet will focus on recruiting new talent and upgrading its infrastructure, in order to take advantage of new 5G cellular communication technologies. It also plans to penetrate the North American and European markets. Financial details of the offering have not been disclosed.
Certusnet ranked fourth in China’s software-defined communication solutions market last year by revenue, according to CIC Data. For the year ended December 2017, it reported RMB508 million in revenue, up from RMB372 million the year before. Over the same period net profit grew from RMB152 million to RMB140 million. Total revenue in the sector is projected to grow from RMB22.7 billion ($3.3 billion) in 2017 to RMB433 billion by 2022.
Founded in 2008, Certusnet listed on the National Equities Exchange & Quotation (NEEQ), or New Third Board, in 2015 as part of a private placement. NEEQ and the Hong Kong Stock Exchange announced an agreement earlier this year to encourage companies listed on the board to list in Hong Kong.
CDH currently holds a 7% stake in the company. Other backers include Shenzhen Venture Capital, an investment arm of the Shenzhen government, which also has 7%.
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