【For Immediate Release】 30 January 2021
Pangaea Connectivity Technology Limited
(Incorporated in the Cayman Islands with limited liability)
(Stock code: 1473)
Propose to be Listed on the
Main Board of the Stock Exchange of Hong Kong
Offer Price sets between HK$0.52 and HK$0.58 per share
Raise up to approximately HK$88.4 million net proceeds
Pangaea plans to offer (the "Share Offer") an aggregate of 250,000,000 shares (subject to the over-allotment option) (the "Offer Shares"), of which 25,000,000 shares are for Hong Kong public offering (subject to reallocation), and the remaining 225,000,000 shares (including 25,000,000 employee reserved shares) are for placing (subject to reallocation and over-allotment option), at an offer price between HK$0.52 to HK$0.58 per shares (the "Offer Price"). The public offering will commence at 9:00am on 30 January 2021 and close at 12:00 noon on 4 February 2021. Trading of its shares on the Main Board of the SEHK is expected to commence on 19 February 2021 (Friday). The share will be traded under the stock code 1473 in board lots of 4,000 shares.
Honestum International Limited is the sole sponsor. CMBC Securities Company Limited, Forwin Securities Group Limited and Lego Securities Limited are the joint global coordinators, the joint bookrunners are CMBC Securities Company Limited, Crosby Securities Limited, Forwin Securities Group Limited, GLAM Capital Limited and Lego Securities Limited. CMBC Securities Company Limited, Crosby Securities Limited, Enhanced Securities Limited, Forwin Securities Group Limited, GLAM Capital Limited, Lego Securities Limited and Victory Securities Company Limited are joint lead managers.
Introduction of Pangaea
Founded in 1990, Pangaea has been a distributor of telecom and datacom connectivity products and provides solution and application support to customers throughout their design and production cycle. In general, the Group's customers incorporate the components through design-in with its technical team and procure those components from the Group to build their communications modules and systems and IoT and network connectivity products. The end applications of the Group's products can primarily be categorised into: (i) telecom infrastructure; (ii) data centres; (iii) IoT and network connectivity products; and (iv) commercial lasers, which accounted for 68.8%, 17.3%, 11.5% and 2.3%, respectively, of the total revenue for the year ended 31 March 2020 and 77.0%, 15.9%, 6.0% and 1.0%, respectively, of the total revenue for the four months ended 31 July 2020.
According to Frost & Sullivan, it is market practice to have distributors as middlemen in the industry due to the diversity and complexity of the telecom and datacom connectivity industry. Being a distributor with strong inhouse design and technical capabilities, as well as self-own wireless and commercial laser application laboratories in Shenzhen, Pangaea plays an important role in the industry chain to bridge the functionality gap between upstream component manufacturers and downstream customers with technical support and value-added services. With a strong in-house design and technical team, engineering expertise and in-depth knowledge of the supply chain, the Group can provide suggestions in manufacturers' product upgrade and/or development of new products.
Pangaea has long term and well-established business relationships with its manufacturer suppliers, who are mainly global leading brand manufacturers in the respective products categories in the telecom and datacom connectivity market according to Frost & Sullivan. As at 22 January 2021, the Group was an authorised distributor of seven manufacturers comprising (i) five brand name manufacturers based in the U.S. or Japan for an average of 19 years; and (ii) two manufacturers based in the PRC with effect from 1 September 2020 and 1 October 2020, respectively. For the years ended 31 March 2018, 2019 and 2020 and the four months ended 31 July 2020, purchases attributable to the Group's five largest suppliers accounted for approximately 87.7%, 88.2%, 87.1% and 91.7% of its total purchase, respectively. For the same period, a substantial portion of its purchases, which accounted for approximately 88.4%, 90.1%, 89.5% and 93.4% of our total purchases, respectively, were made directly from manufacturers.
The Group also diligently cultivates long-term customer relationships with diversified customers, which mainly includes two leading network system equipment providers, communications module manufacturers, providers of IoT and connectivity solutions and products, and other distributors in the PRC. For each of the three years ended 31 March 2018, 2019 and 2020 and the four months ended 31 July 2020, sales to the Company's five largest customers accounted for approximately 49.1%, 40.3%, 47.9% and 64.4% of its total revenue, respectively, with sales to its largest customer accounted for approximately 17.1%, 10.6%, 17.5% and 41.5% of its total revenue, respectively.
The Group's revenue was approximately HK$843.1 million, HK$871.3 million, HK$970.9 million and HK$758.5 million for the years ended 31 March 2018, 2019 and 2020 and the four months ended 31 July 2020, respectively. Its net profit for the year ended 31 March 2018, 2019 and 2020 and the four months ended 31 July 2020 was approximately HK$34.9 million, HK$27.6 million, HK$33.4 million and HK$42.4 million, respectively.
Pangaea's Competitive Strengths
With over 30 years of proven track records, the Company believes that it has the following competitive strengths to contribute to its continued success and potential for growth:
Values Pangaea Creates
As a channel partner of manufacturer suppliers in marketing and distributing their products, as well as a service provider of customers to support their product roadmaps, Pangaea creates the following values to suppliers and customers, respectively.
To customers, Pangaea can
To manufacturer suppliers, Pangaea can
Use of Proceeds
The Group intends to use the proceeds of the Share Offer, after deducting related underwriting fees and commissions and estimated expenses payable in connection with the Share Offer and assuming an Offer Price of HK$0.55 per Offer Share (being the mid-point of the Offer Price range), of approximately HK$88.4 million, for the following purposes:
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About Pangaea Connectivity Technology Limited
Founded in 1990, Pangaea Connectivity Technology Limited is a 30 years' experienced distributor of connectivity products for telecom infrastructure, data centre and IoT. The Company primarily focuses on providing IoT and network connectivity solution and application support to its long-standing customers which consists of communications module manufacturers and leading network system equipment providers and providers of IoT and connectivity solutions and products in the PRC. According to Frost & Sullivan, the Company ranked the third in terms of revenue among the service providers in the telecom and datacom connectivity product distribution market in the PRC in 2019, with a market share of approximately 4.4%.
This press release is issued by DLK Advisory Limited on behalf of Pangaea Connectivity Technology Limited.
For enquiries, please contact:
DLK Advisory 金通策略
Michelle Shi (email@example.com)
Skye Shum (firstname.lastname@example.org)
Kathleen Mui (email@example.com)
Ivy Cheung (firstname.lastname@example.org)
Tel: +852 2857 7101
Fax: +852 2857 7103
Pangaea Connectivity Technology Limited
Global Offering Details:
Use of Proceeds:
Assuming (1) an Offer Price of HK$0.55 per Share, being the mid-point of the indicative Offer Price range HK$0.52 to HK$0.58 per Share, and (2) that the Over-Allotment Option is not exercised, the net proceeds from the Global Offering are estimated to be approximately HK$88.4 million after deducting underwriting commission and other expenses payable by the Group in connection with the Listing.
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The Group's financial summary for the financial year ended 31 March 2018, 2019, 2020 and four months ended 31 July 2020 is as follows:
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29/01/2021 Dissemination of a Financial Press Release, transmitted by EQS Group.