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Watchdata plans NASDAQ listing
By Li Weitao (China Daily)
Updated: 2004-12-24 08:59

Chinese software firm Watchdata Technologies Ltd is planning to list on the NASDAQ stock market in the first half of 2005, in a bid to fuel its business growth.

Watchdata filed an application with the US Securities and Exchange Commission for an initial public offering (IPO) on Wednesday.

Watchdata Technologies, incorporated in the Cayman Islands, conducts almost all of its operations through an indirectly wholly-owned subsidiary Beijing Watch Data Systems Co Ltd.

"We hope to become listed on NASDAQ within half a year," said company spokeswoman Huang Qiang, adding the Christmas and New Year holiday may somewhat slow down the listing process.

Watchdata may sell up to US$100 million in American Depositary Shares (ADS), according to the firm's prospectus.

WatchData is one of China's leading providers of operating system software with data security and encryption functions. The firm said it was the No 5 vendor providing mobile telecommunications microprocessor cards in China last year.

"We mainly focus on the Chinese market but sales in both China and overseas markets are growing rapidly," Huang said.

Watchdata has recently received orders from Thailand, Nepal and Indonesia.

Watchdata currently generates 20 per cent of its revenues from outside of China.

Watchdata shipped approximately 31 million microprocessor cards in 2003, almost eight times the shipment in 2001, the prospectus said, and recorded 321.4 million yuan (US$38.8 million) in sales last year.

In the nine months ended September 30, the firm shipped about 38 million microprocessor cards, and revenue in the period stood at 356.1 million yuan (US$43.0 million).

Watchdata's planned listing underlines a new craze by Chinese firms to become listed in the tech-laden NASDAQ following an across-the-board recovery of Chinese NASADAQ-listed Internet firms.

Chinese Internet portals Sina Corp, Sohu.com and NetEase.com were hit hard by the Internet economy bust, but now have become stars in the NASDAQ, thanks to strong business growth.

Internet firms have been traditionally the most zealous about NASDAQ.

Chinese firms which became listed in NASDAQ this year include Tom.com, online game operator Shanda Interactive Entertainment Ltd, The9, online human resources provider 51job Inc and online travel service provider eLong Inc as well as China Finance Online, a leading provider of online financial information and listed company data.

But now players from other industries are also setting their sights on the NASDAQ.

Chinese software developer Ninetowns Digital World Trade Holdings Ltd said last month it planned to list in NASDAQ by selling 9.6 million ADS to raise about US$100 million.

Chinese media firm Focus Media Holdings, and several local biotech firms have said they are also planning future NASDAQ listings.

Wang Guoping, an analyst with China Galaxy Securities, said he expects more Chinese firms, especially private firms and small businesses to float shares in NASDAQ in the coming years.

"The requirements by the domestic A-share market are quite strict and the market remains gloomy, so firms will be forced to look to overseas stock markets for listing arrangements," Wang said.

It's hard to predict whether Chinese software firms will make NASDAQ debuts as investors traditionally favour Internet firms, the analyst said.

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