Comba Telecom Systems Holdings Limited Hong Kong Public Offer Opens Tomorrow


 Leading PRC wireless coverage solutions provider to be listed in Hong Kong


(Hong Kong, 2 July 2003) – Comba Telecom Systems Holdings Limited ("Company" or "Comba"; SEHK stock code: 2342) today released details about its Hong Kong Public Offer and International Placing ("Global Offering"). The Company will offer a total of 200,000,000 new Shares (subject to the Over-allotment Option) at a maximum offer price of HK$2.125 per Public Offer Share (excluding a 1% brokerage commission, a 0.005% Securities and Futures Commission transaction levy, a 0.002% Securities and Futures Commission investor compensation levy and a 0.005% Stock Exchange of Hong Kong trading fee amounting to a total of HK$43.01 per board lot of 2,000 Shares).
The Global Offering initially comprises 20,000,000 new Shares for the Hong Kong Public Offer and 180,000,000 by way of an International Placing to institutional and professional investors (subject to reallocation and the Over-allotment Option). The new issue will represent approximately 25% (assuming that the underwriters' over-allotment option is not exercised) of the Company's enlarged share capital immediately after completion of the Global Offering and is expected to raise total gross proceeds of up to HK$425 million (excluding the underwriters' over-allotment option).
The Hong Kong Public Offer will open at 9:00 a.m. on Thursday, 3 July 2003, with full details about Comba and the Hong Kong Public Offer available to Hong Kong investors through a prospectus to be distributed on the same day. The Hong Kong Public Offer will close at 12:00 noon on Tuesday, 8 July 2003. Dealing in the shares on the Stock Exchange of Hong Kong is expected to commence on Tuesday, 15 July 2003.
Comba was the leading wireless coverage solutions provider in the PRC in 2002 with a market share in terms of revenue of approximately 21% (source: IDC,2003), and principally provides integrated wireless coverage solutions through its national sales and services network to its customers in the PRC. The Comba Group also sells its wireless coverage products to customers in the PRC and Southeast Asia, such as India, Thailand, Indonesia, Singapore and Taiwan.
The Comba Group's wireless coverage solutions business comprises the research and development, production, sales and marketing of wireless coverage products including repeaters, antennas and RF passive accessories, and the provision of project survey and design, project management, installation, maintenance and other after-sales services in accordance with customers' requirements. The Comba Group has 21 offices located in 19 provinces throughout China providing sales, project survey and design, project management, installation and maintenance services.
Comba's wireless coverage solutions are designed to expand and enhance the coverage of mobile telecommunications networks to improve the quality of reception for mobile phone users. These solutions are used in a variety of indoor and outdoor environments (such as hotels, residential estates, office buildings, airports, exhibition centres, underground stations, highways and tunnels).
Since Comba's establishment in 1997, the Company has established excellent business relationships with the only two licensed mobile operators in the PRC, China Mobile group and China Unicom group. During the three financial years ended 31 December 2000, 2001, 2002, and the four months ended 30 April 2003, sales made by Comba to these two operators were approximately HK$135.3 million, HK$396.4 million and HK$541.5 million and HK$203 million
China has the largest GSM mobile network in the world with approximately 200 million mobile subscribers (as at 31 December 2002). In a population of approximately 1,300 million overall mobile penetration is approximately 16%, which is low compared to around 50 - 80% mobile penetration in North American and European countries. By 2007 it is forecast that the total number of mobile subscribers in the PRC will increase to approximately 371 million with a penetration rate of approximately 28%.
To support this growing wireless telecommunications market, IDC estimates that PRC's wireless capital expenditure will increase from US$8.6 billion in 2002 to US$13.5 billion in 2007. The IDC forecasts that the wireless coverage market will continue to grow over the same five-year period from US$354 million in 2002 to US$905 million in 2007 representing a CAGR of 21%.
Future growth in China's wireless coverage market will come from the increase in mobile subscribers, particularly in under-developed regions of the PRC; mobile operators' and end-users' increasing demand for quality wireless coverage; the upgrading and optimisation of PRC's GSM network; the construction of the second and third phases of the CDMA1x network of China Unicom; the deployment of 3G; and the potential issuance of new mobile licences by the PRC Government.
Comba intends to use the net proceeds from the Global Offering for long term research and development, including 3G; expansion of the Company's product and service portfolio; enlargement of production facilities; expansion in sales network and market coverage; with the balance used as general working capital.
"The Company's objective is to maintain its position as the leading wireless coverage solutions provider in the PRC. With our strong and experienced management team, integrated wireless coverage solutions, quality products and services, strong customer relationships and extensive sales and services network in the PRC, Comba is well positioned to capture future growth opportunities," said Mr Fok Tung Ling, Chairman and Managing Director of Comba.
The Hongkong and Shanghai Banking Corporation Limited is the Global Co-ordinator, Bookrunner, Lead Manager and Sponsor of the Global Offering.