Hong Kong-based multimedia company Tom.com Ltd looks set to list its Chinese mainland Internet wing on the New York NASDAQ stock market and Hong Kong's Growth Enterprise Market (GEM).
The company, controlled by Asia's richest man Li Ka-shing, will list its Internet business Tom Online Inc around March 11 after the move is expected to get the nod from a March 1 extraordinary general meeting.
Tom.com Ltd said the flotation would raise HK$1-1.46 billion (US$128-187 million), according to a statement on the GEM website.
Tom Online's total market capitalization will amount to HK$5.84 billion (US$749 million) after the offering, calculated at the higher end of the range.
At least one quarter of Tom Online's enlarged issued capital will be floated.
Tom.com's stakes in Tom Online will also be reduced from 100 percent to 71.0 percent to 71.8 percent.
On the other hand, the public offering will add HK$562.2-871.8 million (US$72.08-111.77 million) in net assets to Tom.com Ltd.
Michael Yin, a Shanghai-based Internet industry analyst, says Tom Online's separate listing will be beneficial to both Tom.com Ltd and Tom Online.
"It is almost a perfect time for Tom.com Ltd to make the separate listing."
He pointed out that, with the recovery of the Internet industry and the popularity of Chinese Internet companies on the NASDAQ, Tom Online's stocks are likely to get a good price.
Chinese online travel service firm Ctrip.com issued American depository receipts on the NASDAQ on December 10 with an IPO price of US$18, which rose by 88 percent on the first day of trading.
The listing will also help Tom.com Ltd improve its financial status and give the
Hong Kong company more flexibility in terms of future expansion with self-development and acquisitions.
Tom Online will also have more capital to expand its services and enhance its competitiveness with China's "Big Three" Internet companies - Netease.com Inc, Sina Corp and Sohu.com Inc - which are also listed on the NASDAQ.
"The growth of Tom Online in the past year has been enormous in both mobile services, online advertising and online games and it has become a major challenger of the Big Three," said Yin.
Tom.com Ltd said in the statement that Tom Online will spend the proceeds mainly for the expansion of its wireless value-added services, the development of new technologies and for potential acquisitions.
Tom Online said in a filing to the NASDAQ that its 2003 revenues more than doubled to US$77.03 million from US$29.98 million.
Its net profits reached US$19.57 million in 2003, compared with net losses of US$8.35 million in the previous year.
Wireless value-added services including mobile messages, ring tone downloads and picture downloads were the biggest source of revenue pool for Tom Online and contributed to 72.5 percent of the total sum.
