Enice, a Chinese telecommunications company, is listing on the ASX today, part of an emerging trend in China companies coming to Australia.
It’s a way for local Australian investors to get direct exposure to China’s growing telecoms markets and infrastructure supporting mobile voice and data.
But raising capital in Australia also has advantages for Chinese companies.
Enice raised $38 million in 40 cent shares to further expand its wireless telecommunications technology business, develop its technology and move into international markets.
An IPO of the size and scale of Enice would be considered small for China’s markets and perhaps not have the easy liquidity of the Australian market, where it’s considered large enough to be relevant and attract the interest of mainstream investors.
Chinese companies that have also moved to the ASX are mobile commerce platform 99 Wuxian, clothing retailer Sunbridge, citrus grower Dongfang and Sino Australia Oil and Gas.
“When we began this process more than a year and a half ago the Shenzhen/Shanghai market was not open,” Dr Fred Yu, CEO of Enice, told Business Insider.
“We see Australia as a highly attractive market in which to list due to the reputable nature of the stock exchange and Australia’s strong regulatory environment.
“An ASX listing gives us the ability to improve transparency to our clients and business partners that we are a viable business and trusted partner.”
Dr Yu says that being listed on the ASX is highly regarded in China and will be beneficial in dealing with customers and suppliers.
It will also help in establishing an international market.
“As we grow more revenue will come from international markets and we feel the ASX is more regarded around the world than Shenzhen or Shanghai for transparency,” Yu says.
Enice, which has been operating for 15 years, has longstanding relationships with China’s three largest telecommunications carriers: China Mobile, China Telecom and China Unicom.
China’s wireless telecommunications market is forecast to grow to more than $A79 billion 2019 from $A22.24 billion in 2014.