Cogo Group Inc, a Nasdaq-listed Shenzhen-based electronic components and solutions provider, said Friday it was considering a dual listing in Hong Kong to broaden its shareholder base.

The mainland platform services provider had filed to change its domicile to the Cayman Islands and once approved by the shareholders, it would offer Cogo the flexibility to dual-list on the Hong Kong Stock Exchange.

"We are likely to become the first mainland company listed on Nasdaq and then filing second listing in Hong Kong," Jeffrey Kang, chief executive officer of Cogo, told China Daily.

Cogo has already contacted the city's stock exchange, he said but did not give a timetable for the possible listing.

Founded in 1995, Cogo acts as a proxy to work with a majority of original design manufacturers (ODMs) and original equipment manufacturers (OEMs) on the mainland, providing them customized module and subsystem design solutions.

In concert with Lenovo Group Ltd, ZTE Corp and Huawei Technologies Co, Cogo cooperates with more than 50 global suppliers and works with 100 odd blue-chip companies and as many as 1,500 small and medium enterprises.

Although demand from mainland companies, especially the multitude of SMEs is robust, the market is still fragmented as most solution providers in the field are normally small in scale and limited in service types, Kang noted.

Cogo has projected to broaden its suppliers to 500 and customers to 50,000, and more than double its business revenue by 2016 to reach $10 billion, he said.

According to its financial result released Friday, Cogo's quarterly revenue ended March 31 stood at $104.4 million, up 28.9 percent year-on-year compared to $81 million in 2010.

The $4.13 million net profit recorded for the quarter was 18.7 percent more than that of $3.48 million last year.

However, Cogo's business is a niche market little known in the US, Kang admitted. So the company is going in for a second listing in Hong Kong whose investors are more acquainted with its business.

Linus Yip, strategist with First Shanghai Securities, said that solution providers like Kingdee International Software Group Co have been well followed by Hong Kong investors.

"The theme of solution providers is no longer new in Hong Kong. If Cogo finds it hard to be identified in the US, resorting to a second listing in Hong Kong is out of the question a wise choice," said Yip.

China Daily

(HK Edition 05/07/2011 page3)