BYD Electronic may raise $989 million in IPO

BYD Electronic and parent BYD Co. are selling 550 million shares, equivalent to a 25% stake, at HK$10.75 ($1.38) to HK$14 ($1.79) each, according to an e-mail sent to international institutions. BYD Co., based in Shenzhen in southern China, has doubled in Hong Kong trading this year on expectations it may book a profit from spinning off its handset-component unit. BYD Electronic, which competes with Foxconn International Holdings Ltd. for contracts to make phones, forecast profit this year will increase at least 49%.

BYD Electronic makes casings and keypads for Nokia Oyj and Samsung Electronics Co., the world’s top two mobile-phone makers, Daiwa Institute of Research said in a Nov 23 report. The Chinese company, which also assembles phones for Schaumburg, Illinois-based Motorola, is expanding production in China, Hungary and Romania to meet demand, the report said. BYD Electronic projected profit this year will be at least $147.4 million, according to its preliminary listing prospectus. The share sale values BYD Electronics at as much as 17.6 times projected earnings in 2008, based on estimates by UBS AG, the arranger of the listing. Shenzhen-based Foxconn, the world’s largest contract manufacturer of mobile phones, is a unit of Taiwan’s Hon Hai Precision Industry Co.

Global mobile-phone shipments may rise 12% to 1.1 billion handsets this year, with annual growth averaging 9.7% between 2006 and 2010, the report cited technology consulting and research company Gartner Inc. as saying. About 40% of the shares on offer are newly issued by BYD Electronic, according to the e-mail. The rest are existing shares being sold by the parent, China’s largest maker of rechargeable batteries. (dailyherald)