CDH-backed Beijing Digital Telecom eyes $152m HK IPO

The retail chain is offering 166.67 million shares at HK$5.3-7.1 apiece, according to a regulatory filing. BDT has attracted Unicom Innovation Enterprise Investment, an investment arm of China Unicom, as a cornerstone investor. It will pay $3.25 million for around a 2.44% stake, assuming the IPO prices at the mid-point of HK$6.2.

Computer and electronic manufacturers Lenovo Group, TCL Communication Technology, and anti-virus software producer Qihoo 360 Technology are also among cornerstone investors, contributing $45.5 million between them.

CDH invested RMB87 million ($14 million) through CDH China Growth Fund II in 2007, picking up a 14.25% stake in the company. Meanwhile, 3i acquired a 17.42% interest for RMB107 million. Post-offering, CDH and 3i will be diluted to 10.69% and 13.06%, respectively, assuming the overallotment option is not exercised.

BDT generates most of its income from sales of mobile devices and commissions from contracted call service subscriptions and pre-paid SIM cards sold by China Mobile, China Unicom and China Telecom. As of the end of April, the company 1,512 retail outlets, including 956 self-owned and 556 franchised shops.

Total revenue reached RMB12.8 billion last year, compared to RMB8.8 billion in 2012. Gross profit increased from RMB1.46 billion in 2012 to RMB1.74 billion last year. However, the overall gross profit margin decreased from 16.6% in 2012 to 13.6% in 2013 due to falling margins on mobile device sales.

UBS and China International Capital Corporation are the joint sponsors and global coordinators for the IPO.

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• Topics
• Greater China
• Exits
• Consumer
• CDH Investments Management
• 3i Asia Pacific
• IPO
• Consumer
• China
• Exit