SJTU Sunway listed in HK

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Last updated at: (Beijing Time) Saturday, January 10, 2004

SJTU Sunway listed in HK

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Chinese translation, information security and entertainment software-maker SJTU Sunway launched its initial public offering on the Hong Kong Growth Enterprise Market (GEM) on Friday and aims to become the best translation software firm in the Asia-Pacific region.

SJTU Sunway Software Industry Ltd, a Cayman Islands-registered company, issued 70 million stocks on the GEM market at a price of 43 HK cents (5.5 US cents).

The company mainly operates through the Beijing-based SJTU Sunway Software Co Ltd.

Its price closed 55 HK cents (7 US cents), up 27 per cent from its IPO price and 33.89 million stocks were traded.

"The successful listing is set to speed up our business expansion and enhance our capability to provide information localization software and services to enterprises, individuals and translation professionals,"said He Enpei, president of SJTU Sunway Industry, in a statement.

The Chinese mainland software firm raised HK$31 million (US$3.98 million) of net proceeds from the IPO.

SJTU Sunway's revenues in 2002 were HK$40.61 million (US$5.21 million) and its operating profits were US$8.64 million (US$1.11 million).

The figures for the first six months of 2003 were HK$17.40 million (US$2.23 million) and HK$3.82 million (US$490,000) respectively.

"We are confident we will become the best information localization company in the Asia-Pacific region,"said He.

SJTU Sunway has about 150 employees at present and more than 50 are engaged in research and development.

The software business will also invest in building distribution channels in the Chinese mainland and overseas, including setting up sales branches in Chongqing, Shenzhen, as well as Hong Kong to develop the Southeast Asia market.

SJTU Sunway also said it intends to form a strategic alliance with a Hong Kong translation company.

It cited a report by Allied Business Intelligence, a global technology consulting firm, which said that the translation market in Asia will grow from US$1.33 billion in 2001 to US$2.42 billion in 2005, and China will account for 30 per cent of the total by that time.

Qin Zhen, a software industry analyst with Shenzhen-based China Merchants Securities, said the listing will benefit the company, but may have little impact on China's software industry.

"The translation software market in the Chinese mainland is highly competitive, but with the capital raised from the IPO, SJTU Sunway will be able to expand faster,"said Qin.

He believes that besides capital, SJTU Sunway can improve its management skills, which domestic software firms lack.

Another benefit for the translation, entertainment and information security software firm is that it can give options to key employees to attract them to stay with the company, which is quite difficult for domestic software companies.

However, Qin said the long-term benefits are still hard to predict due to low activity in the GEM market and low prices.

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