HONG KONG -- UNISOC, an Intel-backed Chinese semiconductor firm that specializes in developing chipsets for mobile communications and internet of things, is planning to raise up to 5 billion yuan ($706 million) ahead of a planned listing on the country's newly launched STAR Market.
UNISOC, which is also a subsidiary of state-backed semiconductor conglomerate Tsinghua Unigroup, is offering up to a 9.09% stake. This would value the company at about 55 billion yuan, according to its filing with the China Beijing Equity Exchange.
CBEX is an equity transaction bourse and platform run by the government of Beijing for mergers, acquisitions and restructuring of state-owned enterprises.
Each investment institution, or an investment consortium composed of no more than three parties, is required to subscribe to at least 1 billion yuan worth of shares to participate in the deal. The company will only accept yuan-denominated contribution, according to the filing.
UNISOC, in which Intel China holds approximately 14.28% after it invested in the company in July 2015, plans to use the proceeds for the research and development of technologies and products for fifth-generation mobile networks and the internet of things.
UNISOC's products cover mobile chipset platforms supporting communication standards ranging from 2G to 5G, and various chipset solutions in the internet of things, wireless connection, security and TV, among others. With about 4,500 employees, the company has 14 research and development centers and four customer support centers worldwide.
The firm booked revenue of 7.303 billion yuan and a net profit of 255 million yuan in 2018, according to its financial report. Tsinghua Unigroup is the largest shareholder with a 57.14% stake.
The fundraising plan comes about five months after the company announced its plan of going public on the STAR Market by 2020, which would help the firm "realize more transparent and standardized company operation and management."
The company said that by then it aimed to complete a pre-IPO funding round -- which might be this disclosed round -- and restructuring within 2019.
The STAR Market, launched in July, was created to nurture technological innovation in China and to wean reliance on imports. The Nasdaq-style stock market already witnessed wild gains in prices and a few eye-catching IPOs including the $400 million listing of Transsion, a Shenzhen-based smartphone maker that currently dominates the African market.
In contrast to UNISOC, China's biggest semiconductor company listed in the U.S. is facing difficulties. Semiconductor Manufacturing International Corp. voluntarily delisted its shares on the New York Stock Exchange in May due to "low trading volumes of its American depositary receipts and the high costs of maintaining the listing and complying with reporting requirements and related laws," said SMIC in a filing.
DealStreetAsia is a financial news site based in Singapore focused on corporate investment activity in Southeast Asia and India. Nikkei recently acquired a majority stake in the company.