Tech firm files for P6.8-B IPO

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THE local unit of Taiwan-based technology conglomerate New Kinpo Group (NKG) seeks to raise P6.77 billion through an initial public offering (IPO) within the year, as it aims to expand production capacity in the country. — WWW.NEWKINPOGROUP.COM

By Arra B. Francia, Reporter

THE LOCAL UNIT of Taiwan-based technology conglomerate New Kinpo Group (NKG) seeks to raise P6.77 billion through an initial public offering (IPO) within the year, as it aims to expand production capacity in the country.

In an e-mail to reporters late Friday, the Securities and Exchange Commission said Cal-Comp Technology (Philippines), Inc. filed a registration statement regarding its plan to sell up to 378.07 million shares with an over-allotment option of up to 19.9 million shares at a maximum price of P17 each.

The offer comprises around 26.77% of the consumer technology firm’s total issued shares.

Cal-Comp Tech is part of NKG, which offers global electronic manufacturing services and original design manufacturing services to its customers.

The company’s products and services include storage, printers, network-attached storage (NAS), wireless and broadband, digital home, consumer electronics, wearables, 3D printing, robotics, and emerging technologies, among others.

Aside from Cal-Comp Tech, other companies under NKG include Cal-Com Precision (Philippines), Inc. and AcBel Polytech (Philippines), Inc. The latter produces injection molded plastic precision parts and power supplies products for global clients.

Cal-Comp Tech opened its first factory in Batangas in 2015, which spans 140,000 square meters and houses three facilities. It now employs more than 6,000 employees at the Lima Technology Center in Lipa City, and at the First Philippine Industrial Park in Sto. Tomas, Batangas.

The firm looks to use the proceeds of the offer to build new manufacturing facilities in the country, as it plans to introduce new products to the domestic market.

NKG Chief Executive Officer and Cal-Comp Tech President Simon Shen said the planned share sale will help the company expand its foothold in the country, since it has become one of the group’s key manufacturing hubs in Southeast Asia.

The Batangas factory is the company’s 19th manufacturing hub in Southeast Asia.

“We believe our expansion will enable Filipinos to become more competitive in export manufacturing and tech R&D (research and development). It’s also an opportune time for the Philippines to be exposed to tech products that will truly bring homes and industries to the future,” Mr. Shen was quoted as saying in a statement.

The company looks to conduct the IPO before year-end, but did not give a specific date. BDO Capital & Investment Corp. is the offer’s issue manager and sole book runner.

Cal-Comp Tech’s planned IPO comes at a time when the market continues to show volatility, having dropped from its record high of 9,078 last Jan. 29 to a low of 6,929 last week. The index is currently in the so-called bear market territory, indicating that it has dropped by at least 20% from a recent high.

Last week saw the conduct of the first IPO of the year, where property developer and construction firm D.M. Wenceslao & Associates, Inc. raised P8.15 billion. The stock lost 14.5% to P10.26 at the end of its first trading session last week, as the overall negative sentiment weighed on its performance.

Canned fruit manufacturer Del Monte Philippines, Inc., which was scheduled to raise P17.55 billion through an IPO before DMW, deferred its plans due to bearish market conditions.

Asked whether it is a good idea to conduct an IPO given the currently volatility, BDO Capital President Eduardo V. Francisco said Cal-Comp Tech would have to be prepared for the market’s movements.

“We just have to be ready as the markets can improve anytime,” Mr. Francisco said in a text message.

Meanwhile, Timson Securities, Inc. Trader Jervin S. De Celis said the performance of the IPO will depend on the timing.

“But I think the funds that they’re raising is smaller than the previous IPOs that we’ve seen and sometimes market players take that into consideration. If the company’s market cap is small, it might interest the short-term players. We’ll have to see its fundamentals first and assess whether the demand will be strong or not,” Mr. de Celis said in a separate message.