CHINA Digital TV Holding Co, which provides smart cards for digital TV operators to control access to their programs, plans to raise as much as US$156 million selling shares on the New York Stock Exchange, according to a regulatory filing.
The Beijing-based company intends to sell 12 million American Depositary Shares at US$11 to US$13 apiece. Each ADS equals one ordinary share, which means the stock sale represents a 21.6 percent stake in the company.
China Digital TV may expand the offer by up to 15 percent if the underwriters exercise their over-allotment option to meet demand and stabilize the share price, the company said in a filing with the US Securities and Exchange Commission dated last Friday.
The company will use the proceeds from the stock offering for research and development, sales, marketing and acquisitions.
The share sale comes as China is in the middle of digitalizing its TV networks to improve program quality, creating a huge market for products such as conditional access systems and signal adaptors.
China boasts the largest audience in the world with television sets in 362 million homes. But only a little more than one-third subscribed to cable TV programs as of the end of last year, according to Analysys Intentional, a Beijing-based consultancy.
The State Administration of Radio, Film and Television announced in 2003 that all TV broadcasts would be converted to digital format by 2010, and the cable TV networks will switch off all analog transmissions by 2015.
China Digital TV, the largest provider of smart cards in the country, sold 2.8 million units in the first half, compared with 1.3 million a year ago.
Revenue for the first six months more than doubled the year-ago level to reach US$21.67 million, and net income was US$12.16 million, up from US$3.41 million.