ChinaCast aims to be 1st China Net IPO on SGX
Issue to raise $50m planned for end- April; company to set up rep office
By JOYCE KOH
A US Nasdaq listing was on the cards, but poor timing derailed its plans in 2002. Two years later, ChinaCast Communication Holdings is billed as the first Chinese Internet play getting a berth on the Singapore Exchange.
The company, whose initial public offering (IPO) to raise about $50 million is slated for the end of the month, hopes to cash in on the burgeoning US$90 billion education market in China to fuel its growth.
ChinaCast chief executive Ron Chan said he chose to get a listing on the local bourse as he felt technology plays are coming back into favour with investors here.
Another reason, he said, was the proximity to the Asian market, which will allow a more timely relay of information.
Mr Chan also indicated that he intends to set up a representative office in Singapore.
The company will use the bulk of the IPO proceeds to fund new product developments and solutions, as well as acquire other businesses.
The five-year-old Beijing-based company provides satellite-based broadband Internet solutions to education institutions, government agencies and multinational companies in China.
ChinaCast's main market is the education sector, where it has already signed up 15 universities to provide interactive distance learning services to over 70,000 students.
It wants to plug into the heart of an education market where it is estimated that only about a tenth of the people of school-going age actually make it to the campuses of universities.
By tying up with the schools, ChinaCast gets about 20-30 per cent of fees paid by students who have signed up to attend virtual lessons.
A new area of growth for the company is the provision of enterprise networking services, which it hopes will make up about 20 per cent of its turnover this year.
This new division will help companies upgrade their IT infrastructure through point-of-sale systems, credit card authorisation and customer relationship management.
ChinaCast's turnover for FY2002 rose 178.4 per cent to 77.4 million renminbi (S$15.5 million). It turned around from a loss of 38.6 million renminbi in FY2001 to post a pre-tax profit of 16.9 million renminbi in FY2002.
For the nine months ended Sept 30, 2003, pre-tax profit rose 156.4 per cent to 28 million renminbi.