HomeWorld BusinessECS bets on selling iPads, iPhones in China

ECS bets on selling iPads, iPhones in China


Singapore-listed ECS Holdings, which recently clinched nation-wide distribution rights for Apple’s iPad and iPhone in China, hopes to raise gross proceeds of around$50 million from the listing of its Taiwan Depository Receipts.

The firm is in the process of submitting documents to Taiwan’s regulator and aims to make its debut on the Taiwan Stock Exchange in the first half of 2011, group CEO Narong Intanate told Reuters in an interview.

The cash will be used to expand its business in the region as ECS, which is currently the fourth-largest distributor of IT products in China by revenue, aims to move up to the top three by the end of next year, he said.

Taiwan’s securities market, where foreign companies are seeking secondary listings through the sale of Taiwan Depository Receipts (TDRs), have attracted firms from China and Singapore due to attractive valuations.

Taiwan’s TDR market also received a boost from improving trade ties with China, encouraging many Singapore-listed Chinese companies to sell shares there.

Intanate said the company hopes to fetch a better valuation in Taiwan, adding ECS was trading at an estimated 2010 price-earnings ratio of 5 times in Singapore, compared to rival Synnex which trades at 16-18 times in Taiwan.

“In Taiwan’s stock market, majority are technology stocks, so Taiwan investors do understand technology companies well including distribution business,” Intanate said.

ECS also sees annual double-digit growth in its revenue for the next four years, in line with rising IT spending in its key markets as consumers become increasingly wealthy.

Currently China makes up 45% of ECS’ revenue. Thailand and Malaysia contribute 15-16% each, while Philippines, Indonesia and Singapore individually accounts for around 8%, Intanate said.

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