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Vtion Wireless Technology plans IPO in the Prime Standard at Frankfurt Stock Exchange in early October 2009

  • First day of trading in the Prime Standard scheduled for early October 2009
  • Specialist for wireless data cards for mobile computer use and associated services
  • 2nd-largest player in China with an estimated market share of 25% in 2008
  • Rapid growth in the sale of 3G data cards by the Vtion Group since 3G wireless networks were launched in China in May 2009
  • Strong sales growth and sustained net earnings margin of more than 25%

Frankfurt, 22. September 2009

The Vtion Group, one of the three leading suppliers of wireless data card solutions for mobile computer use in China, intends to go public in early October 2009. Vtion aims to obtain a listing in the Prime Standard at Frankfurt Stock Exchange. Sal. Oppenheim jr. & Cie. KGaA is the lead manager and Macquarie Capital (Europe) Limited is acting as another syndicate bank.

 

Strong market position in China

The Vtion Group was established in 2002 and has developed into one of the three leading suppliers of wireless data card solutions since then. The Vtion Group aims to become the leading supplier of wireless data card solutions in China by exploiting its competitive strengths, such as the close relationships to the three major mobile phone network operators in China (China Telecom, China Mobile and China Unicom), in-depth know-how about the Chinese wireless data card market, impressive product development capacities, a broad product portfolio and a strong, well-known brand name.

At the present time, the Vtion Group is the only provider of Internet-based data services in the wireless data card field in China. In the context of Internet-based data services, which are targeted mainly at business travellers in China, the Vtion Group offers the members of its business club an Internet accelerator (which shortens website loading times and optimises the reliability of Internet connections), a virus scanner, a text messaging service, an electronic fax service, an online translation service and an Internet travel service. These data services are provided to a very large extent by co-operation partners on the basis of appropriate licensing agreements. The Vtion Group business club had 227,376 members on 31. August 2009.

 "We have steadily and systematically developed our business in the past two years and are now in an excellent position to benefit from the significant opportunities on the Chinese market for mobile broadband data transmission: We have expanded our customer base significantly compared to the situation two years ago; all three major Chinese telecommunications providers are our customers now and we are preferred suppliers to them. 3G was a plan two years ago and now it is reality - the 3G licences were issued in January 2009, the first 3G networks went live in mid-May 2009 and the roll-out of the 3G networks has triggered dynamic new developments, in which the telecommunications providers intend to invest more than EUR 30 billion and the Chinese government has set the target of covering 96% of the population by the end of 2011. We plan to use the proceeds of the IPO and the standing of a Frankfurt listing to grow even faster and to increase our profitability," says Chen Guoping, founder and CEO of the Vtion Group. "Since 3G networks were launched in China in May 2009, we have been focussing primarily on selling 3G wireless data cards - we are currently seeing considerable growth in demand from month to month here, particularly from China Telecom and China Unicom. Our aim is to become the leading supplier of wireless data cards and associated services in China."

 

Listing in the Prime Standard at Frankfurt Stock Exchange

The company is planning a public offer in Germany and Luxembourg as well as private placements outside Germany, Luxembourg and the United States. All of the shares for the basic transaction are coming from a capital increase. Shares owned by the existing shareholders are only being placed in the context of a possible greenshoe option.

The purpose of the proceeds of the issue is mainly to fund further expansion of the Vtion Group. Most of the funds received are to be invested in expansion of the research and development capacities and selective acquisitions to broaden the product range and to take advantage of our excellent relationships with the telecoms operators, while some of the proceeds will go into working capital to finance the growth strategy. A particular objective in the context of our new marketing strategy as a virtual network operator (VNO) in the data field is to implement product packages consisting of a 3G data card and wireless Internet access via retail partners using shop-in-shops. A successful start was already made on this in the province of Fujian in August 2009 on the basis of an agreement with China Telecom.

 

Attractive financial indicators

Vtion generated sales of EUR 39.2 million in the 2008 financial year, following EUR 29.0 million in the previous year - growth of about 35 per cent. Earnings before interest and tax (EBIT) amounted to EUR 12.6 million; this represents an EBIT margin of 32 per cent. The net profit amounted to EUR 12.4 million. In the first six months of 2009, the Vtion Group achieved sales of EUR 19.5 million in the wireless data card business, which correspond to 92 per cent of the total Group sales during this period and an increase of 12 per cent over the same period the previous year. EBIT in the first six months of 2009 totalled EUR 6.0 million, while net profit amounted to EUR 5.3 million.

In the first eight months of 2009, the Vtion Group reached sales of EUR 38.2 million and a net profit of about EUR 10.0 million. This means that the net profit margin was 26.0%.

 

Technologies for the future

The Chinese mobile phone network industry is currently going through a process of market development from the second mobile phone generation to standards of the third mobile phone generation ("3G standards"). The Vtion Group is expecting completion of the establishment of 3G mobile phone networks to lead to a further increase in demand for wireless data cards in China. The Vtion Group sold 898,885 wireless data cards in the first eight months of the 2009 financial year - already 48% more than in the whole of 2008. The Vtion Group considers itself to be one of the few suppliers of wireless data cards that is able to produce wireless data cards for all 3G standards.

 

About Vtion

The Vtion Group is one of the three leading suppliers of wireless data cards and associated services for the mobile use of computers via broadband wireless networks in the People's Republic of China. The Vtion Group concentrates mainly on the development and sale of wireless data cards, including provision of appropriate after-sales services. The Vtion Group also supplies Internet-based data service solutions. The company has about 150 employees. The Vtion Group generated sales of EUR 39.2 million and a net profit of EUR 12.4 million in 2008.

 

For further information, please contact:

Kirchhoff Consult AG
Dr Kay Baden, tel.: +49 40 60 91 86 0, baden@kirchhoff.de
Janina Wismar, tel.: +49 40 60 91 86 50, janina.wismar@kirchhoff.de
or visit the company website at: www.vtion.de

 

 

Disclaimer

"This publication is not an offer of any securities for sale or a solicitation of an offer to purchase any securities. The offer of shares is only made through and on the basis of the prospectus approved by the Bundesanstalt für Finanzdienstleistungsaufsicht. The prospectus is available on the website of the company on www.vtion.de, a copy can be requested from the company (fax-no. +49-(0) 40 60 91 86 60) and from Sal. Oppenheim (fax-no. +49-(0) 69 71 34 51 69), free of charge.

This document is not an offer of securities for sale or a solicitation of an offer to purchase securities in the United States. The shares of Vtion Wireless Technology AG (the "Shares") have not been registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold in the United States unless registered under the Securities Act or pursuant to an exemption from such registration. There will be no public offering of the Shares in the United States and the Shares will not be registered under the Securities Act.

This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). The Shares are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents."

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