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Dongshan seeks CNY2bn
Posted on Friday, 18 October 2019 11:27
Suzhou Dongshan Precision Manufacturing has set out plans to raise as much as CNY 2.00 billion (USD 281.93 million) to expand production capacity.

The manufacturer of electronic components intends to issue up to 321.31 million new shares to no more than ten qualified investors but did not provide further details such as price or timeframe.

Beijing is promoting and pushing for the roll-out of 5G in the communication industry, which comprises wireless and transmission equipment, fibre optic networks and systems integration, among other things.

This next generation of wireless technology is expected to be a growth driver for products ranging from chips to sensors.

With regards to the communication network industry, the commercial application of 5G technology is projected to boost upstream demand.

This in turn will drive the need for upgraded multiple input, multiple output antennas, data processing capabilities and flexible printed circuit boards (PCBs), among other things.

Dongshan already has the production capacity for industrial components such as filters, antennas, PCBs and die-casting, among others, and the set-up and technical capabilities to provide integrated wireless communication modules.

The group claims to be one of best-known suppliers of base station communication equipment components in China and among the top three flexible PCBs manufacturers globally, and the fifth-biggest in terms of PCBs.

Dongshan noted proceeds raised will accelerate the integration of internal resources and improve research and development of 5G products in this field.

A subsidiary will work on designing and making 5G compatible indoor wireless access points to boost signal transmissions.

Dongshan also intends to add capacity at an existing flexible PCB plant and will also use funds to upgrade another facility run by Multek, which was acquired in July 2018.

In recent years, the company has maintained rapid development, boosted sales revenue and expanded production scale, all of which has put pressure on capital and led to higher corporate debt levels.

Dongshan the non-public offering of shares will improve the structure of assets and liabilities and reduce financial risks and support business operations.

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