World Wide Touch Technology (Holdings) Limited, a Hong Kong-based maker of capacitive touch pads for notebook computers, said Wednesday it will use around half of the HK$904 million it hopes to raise from its IPO for equipment upgrades and research and development.

The company will start offering 861 million shares today in an indicated price range of HK$0.85 to HK$1.05 per share, hoping to raise up to HK$904 million in new capital, according to details released by the company.

World Wide Touch Technology first sought a Hong Kong flotation in June of this year but later postponed it, citing poor market performance as the Hang Seng Index was struggling below 20,000 at that point. The company planned to raise up to HK$1.5 billion then.

Kelvin Wong, chairman and chief executive officer of the company, said Wednesday that investors have given a very positive feedback at the IPO road show this time. Though the size of the offer shrank compared with the company's previous attempts, Wong said the new capital raised will be enough for the company's future development in the next five years.

According to its IPO prospectus, 33 percent of net proceeds, or HK$195.8 million, will be used for the purchase and upgrade of production and testing equipment, while 26 percent of net proceeds, or HK$154.3 million, will be used to enhance research and development capability. Another 20 percent will serve as a reserve for future acquisitions of new technology and for vertical integration.

The company also said that it expects that its net profit for 2010 will be no less than HK$205 million, or earnings per share of no less than HK$0.07. The company booked a net profit of HK$104.3 million for the first six months of 2010, up 243.4 percent from the HK$30.4 million it reported in the same period in 2009. For full-year 2009, the company posted a net profit of HK$153.1 million, 78 percent higher than the HK$86 million it made in 2008.

World Wide Touch Technology was founded in Hong Kong in 1995, later moving its facilities to Heshan and Jiangmen in Guangdong province. Around 50 percent of its products are capacitive touch products used on mobile phones and notebooks, with three other product lines - fingerprint biometric products, wireless charging products, and plasma lighting sources.

The company employs around 5,000 people at its Pearl River Delta facilities. Responding to concerns about pressure for wage hikes, Wong said labor costs are not a significant concern for the company as it represents less than 10 percent of its total.

Currently, the company only supplies to overseas markets. Wong didn't give an explicit answer to questions about the company's mainland strategy.

China Daily

(HK Edition 12/02/2010 page3)