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Tradelink Announces Main Board
Listing Details
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Placing
and Public Offer of 233,280,000 Shares
at price in the range of HK$1.09 and HK$1.29 per Share
| Investment Highlights |
- Dominant market player with over 90% market share
- Professional management team and strong shareholder
background
- Strong financial position and attractive yield
- New growth drivers in supply-chain management
service and active trade with Mainland China
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(Hong Kong, 17 October 2005) - Tradelink Electronic Commerce
Limited (“Tradelink” / the “Group”),
a leading provider of electronic commerce service for both the
Hong Kong and international business communities, today announced
the details of its proposed listing on the Main Board of The Stock
Exchange of Hong Kong Limited (“SEHK”).
The listing entails an offer of 233,280,000 new shares in aggregate,
of which 209,952,000 shares will be international placing shares
and 23,328,000 shares will be offered to the public in Hong Kong.
The indicative offer price range is between HK$1.09 and HK$1.29.
Assuming the Over-allotment Option is not exercised and based
on an offer price of HK$1.09 or HK$1.29 per offer share (being
the lowest or highest point of the indicative offer price range),
the gross proceeds are estimated at approximately HK$254 million
to HK$301 million. New Issue and Vendor Sale accounts for 25%
and 75% respectively of the Share Offer. The Government is the
only shareholder participates in the Vendor Sale.
The public offer will begin on 18 October 2005 (Tuesday) and
end at noon on 21 October 2005 (Friday). The allotment results
will be announced on 27 October 2005 (Thursday). Dealing in the
shares of Tradelink is expected to commence on the Main Board
of SEHK on 28 October 2005 (Friday) under the stock code 536.
Shares will be traded in board lots of 2,000 shares. DBS is the
Global Coordinator, Bookrunner, Lead Manager and Sponsor.
The net proceeds of the new issue will be used for identifying
and developing new electronic services in the logistics and supply
chain related areas and as general working capital.
Mr. Justin Yue, CEO of Tradelink, said, “We
are delighted to witness the achievement of this major milestone
in the Group’s development. Tradelink’s successful
listing in Hong Kong will be crucial in helping us to enhance
our growth and our capabilities in launching new services. After
our listing, we will move on not only to strengthen our leading
position in the Government Electronic Trading Services market
but also to extend our presence and influence in the private sector.”
Established in 1988, Tradelink was the first company appointed
by the Government to provide Government Electronic Trading Services
in relation to certain official trade-related documents in Hong
Kong. The Group enjoyed first-mover advantages during the term
of the exclusive government franchise between 1 January 1997 and
31 December 2003, giving it a strong base to continue to maintain
the largest market share in the provision of Government Electronic
Trading Services. It has well over 90% of the market in the Import
and Export Declaration (“TDEC”) and the Dutiable Commodities
Permits (“DCP”) services for the six months ended
June 2005.
With multiple access channels and a highly scalable and reliable
computer system platform, Tradelink offers a wide range of reliable
and efficient trade-related electronic services to both the public
and private sectors in Hong Kong. Over the years, Tradelink has
built an impressive customer base of more than 54,000 registered
subscribers, including exporters, importers and manufacturers,
carriers and forwarders. And for them, Tradelink handles over
18 million transactions every year.
Tradelink has a management team known for their close involvement
and ties with trade in both the public and private sectors. It
is also backed by a group of powerful shareholders. The Government
is the largest single shareholder of Tradelink and the other shareholders
are key local players in the international trade circle. Led by
this expert management team, the Group has maintained a healthy
financial position. Its cash on hand amounted to nearly HK$ 400
million as at 30 April 2005 with zero gearing. Consolidated profit
after taxation for the year ending 31 December 2005 is expected
to amount to no less than HK$85 million.
Going forward, Tradelink is all geared up for growth in the years
to come. In the pipeline, it has ready for Hong Kong and international
users the new DTTN System, an open, neutral and reliable infrastructural
platform for linking information systems in a supply chain. Covering
more than 60 commonly used commercial documents, DTTN provides
a convenient window to trade and transportation service providers,
allowing the optimization of logistics processes by supporting
the major processes and e-documents requirement for international
trade. Tradelink has signed a 15-year operating agreement with
the Government and will pilot run the system by the end of 2005,
with a full launch in April 2006.
Mr. Yue concluded, “Besides readying ourselves for growth
opportunities in Hong Kong, Tradelink is ready to explore the
huge development potential we see for our products and services
in Mainland China. With trading activities booming on the mainland
and the Chinese government forging ahead with ‘informatization’
in both the country’s public and private sectors, Tradelink
is presented with immense room for achieving bountiful growth
in years to come and we are committed to generating satisfactory
returns to our shareholders.”
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Details of the IPO:
Offering Structure
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| Number of Offer Shares: |
233,280,000 Shares
(subject to Over-allotment Option) |
| Number of Placing Shares: |
209,952,000 Shares consisting
of 52,488,000 New Shares and 157,464,000 Sale Shares
(subject to Over-allotment Option and reallocation) |
| Number of Public Offer Shares: |
23,328,000 Shares consisting
of 5,832,000 New Shares and 17,496,000 Sale Shares
(subject to reallocation) |
| Over-allotment Option: |
34,992,000 Sale Shares, representing
15% of the Offer Shares initially available |
| Offer Price Range: |
HK$1.09 to HK$1.29 per share |
| Market capitalisation |
Approximately HK$848 million
to HK$1,003 million |
| Pro forma fully diluted P/E
multiple based on 05 forecast net profit |
Approximately 10.0 times to
11.8 times |
| Stock code |
536 |
Use of Net Proceeds:
Assuming the Over-allotment Option is not exercised and based
on the offer price of HK$1.19 per offer share (being the mid-point
of the offer price range), the net proceeds are estimated at approximately
HK$53.8 million and will be applied for.
- Identification and development
of new electronic services (excluding DTTN) such as the
electronic submission of manifest and advance cargo information
in respect of cargoes carried by road mode of transport,
and new services relating to application of RFID (radio
frequency identification) technology in logistics.
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40
million |
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Remaining balance |
Profit Forecast & Dividend Policy
Forecast consolidated profit after taxation for the year ending
31 December 2005 is not less than HK$85 million.
Assuming a net profit of HK$85 million for FY2005, payout ratio
of 80% and the indicative price range, the dividend yield would
amount to 6.8% - 8%.
It is the Directors’ intention to recommend annual dividend
as follows:
- Remaining period of FY05 and FY06: not less than 80% of net
profit after tax
- Thereafter: not less than 60% of net profit after tax
Track Record
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For
the 4-mth
ended 30 Apr |
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For
the year ended 31 March |
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|
2005
HK$’000 |
|
2004
HK$’000 |
2003
HK$’000 |
2002
HK$’000 |
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|
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| Turnover |
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75,773 |
|
279,706 |
308,481 |
302,748 |
| Profit before taxation |
|
35,224 |
|
83,554 |
121,499 |
136,512 |
| Taxation |
|
(5,621) |
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(20,586) |
(23,801) |
(22,347) |
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|
|
|
|
|
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| Profit attributable to shareholders |
|
29,603 |
|
62,968 |
97,698 |
114,165 |
| Excluding one off item |
|
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|
|
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| Add: |
Impairment
of investment securities |
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|
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40,000 |
7,500 |
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|
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|
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| Less: |
Reversal
of provision for termination costs and long service
payments |
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|
11,422 |
| Adjusted net profit |
|
29,603 |
|
102,968 |
105,198 |
102,743 |
Key Financial Ratios
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For
the 4-mth
ended 30 Apr |
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For
the year ended 31 March |
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2005 |
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2004 |
2003 |
2002 |
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Operating profit margin
(before impairment charges) |
|
43% |
|
44% |
43% |
42% |
| Net profit margin |
|
39.1% |
|
22.5% |
31.7% |
37.7% |
| Effective tax rate |
|
16.0% |
|
24.6% |
19.6% |
16.4% |
| Return on equity |
|
33.1%* |
|
39.3% |
43.4% |
N/A |
| Current ratio |
|
1.81 |
|
2.00 |
1.89 |
1.64 |
| Debtor’s turnover days |
|
5 |
|
5 |
6 |
5 |
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*Annualised |
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About Tradelink Electronic Commerce Limited
Established in 1988,Tradelink Electronic Commerce Limited, a
joint venture between the Hong Kong SAR Government and private
sector shareholders, is a leading provider of trade-related electronic
services for both Hong Kong and international business communities.
Over the years, by perfecting its infrastructure and developing
services that meet users’ practical needs, Tradelink has
earned the trust of the trading community and built a superb reputation
that underscores its dominance in the public e-trading services
sector. It offers a unique range of customer support solutions,
designed specifically to help customers gain maximum benefits
from e-commerce. It makes the use of electronic services as affordable,
convenient and user-friendly as possible for its customers.
- End -
For enquiries:
- O -
For press enquiries, please contact Tradelink (Corporate Communications)
on 2599 1686.
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