MANILA, Philippines — Unfazed by bearish market conditions, member of Cal-Comp Technology (Philippines) Inc. of Taiwanese conglomerate New Kinpo Group, will proceed with its initial public offering this year.
The company recently applied for a P6.77 billion IPO with the Securities and Exchange Commission (SEC). Proceeds will be used for facilities expansion, acquisition of new equipment, and research and development.
Under the plan, the company will sell up to 378 million primary common shares, with a target listing date before the end of the year.
“We believe in the Philippine economy and we leverage on the current local and global market conditions, instead of running away from them,” New Kinpo Group (NKG) and Cal-Comp Technology CEO Simon Shen said.
Shen said the weakening peso is not a threat to an export-oriented company like Cal-Comp Technology, but a favorable condition, explaining that the lower exchange rate has reduced the company’s costs and enabled it to lower its prices in terms of dollars and become more globally competitive.
“Export is an important component of the gross domestic product (GDP), and we believe that the Philippine government will not let the exchange rate hamper economic growth. Also, our strong relationship with partners makes us flexible in dealing with the peso value,” Shen said.
The company is likewise optimistic about the global electronics manufacturing services (EMS) market, saying that prospects are good for New Kinpo Group’s EMS and original equipment manufacture (OEM) business.
Globally, the EMS market size is expected to enjoy a compounded annual growth rate (CAGR) of 4.12 percent.
The EMS market size in Southeast Asia, which holds a market share of 9.58 percent in 2017, is expected to have a CAGR of 6.5 percent.
Against this backdrop, NKG remains one of the major players, ranking in the top 10 of the global EMS market.
Cal-Comp Technology is engaged in global electronic manufacturing services and original design manufacturing.
The benchmark Philippine Stock Exchange index hit a record low of 6,986 last June due to a global trade war, political uncertainties, inflation rate, and the weakening peso.