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Bird share issue to finance growth
By Chen Zhiming (China Daily)
Updated: 2004-07-13 09:15
Ningbo Bird Co Ltd, one of the country's leading handset makers, has revealed
that it will issue 32 million shares tomorrow to raise 660 million yuan (US$79.5
million) to finance its further expansion.
Bird said in a statement that the proceeds from the share issue will go
towards upgrading its sales and customer services network, enhancing the
capacity of its intelligent mobile information terminals and constructing two
assembly lines to annually produce one million higher-grade handsets for the
CDMA (code division multiple access) standard.
"The environment for our main business is very complicated due to intense
domestic competition as well as the reduction of the handset production cycle,"
Bird said in the statement published in China Securities Journal.
The company's shares will be suspended for one hour tomorrow morning, ahead
of the issue, and will also be suspended from July 15 and resume trading on July
21.
Bird has overtaken Motorola and Nokia to become the country's top cellphone
vendor, planning to sell 20 million mobile phones this year, according to the
Ministry of Information Industry.
Sales of its handsets reached more than 11.3 million units last year, leading
the market for the fourth consecutive year, according to company figures.
And it exported more than 200,000 handsets in the first quarter of this year.
Bird is also one of a handful of Chinese firms harbouring global ambitions in
order to break free from intense domestic competition.
It began shipping handsets in the second half of 2003 to 30 Asian markets,
including the Philippines, Thailand, Indonesia and Viet Nam, shifting one
million units as of May, a senior executive said.
China's mobile phone subscribers topped 300 million by the end of May, which
is approximately equal to the population of the United States.
"The surging numbers represented a high momentum despite fiercer market
competition," said China Securities analyst Dai Chunrong.
Dai predicted that a further 60 million mobile subscribers would be recruited
in China this year.
"The expansion is likely to help Bird reach its target of becoming
increasingly exposed to both domestic and foreign competition."
CITIC Securities analyst Wang Jiawei believed Bird is quite competitive given
the advantages it has in terms of its comprehensive sales channels and effective
cost management.
Figures indicate that Bird has a total of 30,000 sales outlets.
Wang predicted that competition will continue to be "ferocious" this year.
For example, with telecom operators such as China Mobile and China Unicom
expanding their business in phone sales, Wang said telecom operators' partners
such as Nokia and Motorola may have a better position compared with Bird.
"Despite increased export of Bird mobile phones last year, these still do not
remain a major source of revenue either in this year or the next."
"Meanwhile, a lack of key technology also remains an obstacle for the firm as
it seeks a firm foothold in the international market," he said.
Bird announced last month that it launched a strategic co-operation with
Siemens to enhance its competitiveness in the Chinese market.
According to the agreement, Siemens will sell its mobile phones via Bird's
nationwide outlets.
On the other hand, Bird will develop its self-owned handset based on Siemens'
handset developing platform.
Both of the firms set up two training centres in Shanghai and Shenzhen to
train 20,000 staff in the coming year.
Bird will launch an online promotion today at www.cs.com.cn.
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