Global Market Group Ltd plans for Initial Public OfferingCompany Snapshot:
A leading business-to-business, or B2B, e-commerce service provider
Industry Snapshot (Per Filing)
- The fast growth of China’s export market has contributed significantly to China’s economic growth. According to the iResearch Report, there were approximately 10 million suppliers of made-in-China products in 2010. Such suppliers include direct manufacturers, trading companies, domestic trade companies and wholesalers. Out of this large number of suppliers, approximately 130,000 manufacturers accounted for approximately 92.2% of China’s total export sales volume in 2009. Most of these manufacturers are large and medium-sized manufacturers, who typically own production facilities, export their products, had annual export sales volume exceeding US$2.5 million, and have experience in export trade. We believe they are the key driver for the growth of China’s export market.
- The B2B e-commerce market in China has grown significantly as the Internet has gained increasing acceptance in China. Many manufacturers in China choose to join a respected B2B e-commerce community to gain brand recognition and to attract reputable buyers. B2B e-commerce platforms that focus on high-quality manufacturers take active measures to verify the information listed on their websites about manufacturers. Operators of these platforms also typically have extensive knowledge about the industry verticals in which they are involved and utilize such knowledge to help buyers and manufacturers conduct business more efficiently. Furthermore, the number of manufactures in China who pay subscription fees or make other payments to use third-party B2B e-commerce platforms is also increasing. According to the iResearch Report, the number of small and medium size enterprises in China paying to use third-party B2B e-commerce platforms increased from approximately 0.8 million in 2008 to approximately 1.0 million in 2009, representing an increase of 25.0%, and is expected to further increase to approximately 5.4 million in 2014, representing a CAGR of 40.1% from 2009
Use Of proceeds:
We estimate that we will receive net proceeds from this offering of approximately US$1.0 million, assuming an initial public offering price of US$6.50, which is the midpoint of the estimated public offering price range set forth on the cover of this prospectus, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. We expect to use the net proceeds from this offering for our business expansion, including additional selling and marketing activities, research and development, potential acquisitions of complementary businesses, and other general corporate purposes.
Underwriter: Roth Capital Partners
Proposed offering price: $6.00 to $7.00
Post IPO Share Calculation: (Using a 10 to 1 Ordinary to ADS conversion ratio).
- 45,157,692:Pre IPO fully diluted share count used in EPS calculation.
- 2,000,000: 650,000 new ADS shares + 1,350,000 ADSs from selling shareholders
- 300,000: Underwriter over-allotments ADS shares
GeoTeam® best effort calculation of total post IPO ADS count to be used in EPS calculations, assuming full conversions and a Ordinary to ADS conversion ratio of 10 to 1: 46,107,692
Financial Snapshot: December Year End
For the Year Ended
December 31, |
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2007 |
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2008 |
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2009 |
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2010 |
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(U.S. dollars in thousands, except share data and per
share data) |
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Revenues |
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4,381 |
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8,840 |
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16,382 |
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26,678 |
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Cost of revenues |
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(515 |
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(1,131 |
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(1,805 |
) |
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(3,031 |
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Gross profit |
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3,866 |
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7,709 |
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14,577 |
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23,647 |
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Operating expenses: |
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Selling and marketing expenses |
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(2,305 |
) |
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(5,983 |
) |
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(11,351 |
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(12,916 |
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General and administrative expenses |
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(822 |
) |
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(1,977 |
) |
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(3,335 |
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(3,531 |
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Operating income (loss) |
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739 |
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(251 |
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(109 |
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7,200 |
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Other income |
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— |
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— |
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— |
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57 |
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Foreign exchange gain (loss) |
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108 |
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52 |
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(19 |
) |
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20 |
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Interest income |
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98 |
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335 |
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94 |
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30 |
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Income (loss) before income taxes |
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945 |
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136 |
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(34 |
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7,307 |
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Income tax (expense) benefit |
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(4 |
) |
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13 |
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88 |
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(353 |
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Income (loss) from continuing operations |
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941 |
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149 |
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54 |
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6,954 |
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Income (loss) from discontinued operations, net of income tax |
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1,249 |
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(5,933 |
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(636 |
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(2,502 |
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Net income (loss) |
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2,190 |
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(5,784 |
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(582 |
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4,452 |
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Cumulative dividends of Series A contingently redeemable convertible preferred shares |
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(250 |
) |
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(355 |
) |
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(336 |
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(336 |
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Cumulative dividends of Series B contingently redeemable convertible preferred shares |
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— |
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(1,463 |
) |
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(1,681 |
) |
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(1,681 |
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Repurchase of Series A and B contingently redeemable convertible preferred shares |
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— |
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(640 |
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— |
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— |
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Modification of the Series A contingently redeemable convertible preferred shares |
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— |
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(1,307 |
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— |
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— |
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Net income (loss) attributable to shareholders |
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1,940 |
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(9,549 |
) |
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(2,599 |
) |
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2,435 |
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Net income (loss) attributable to Global Market Group Limited ordinary shareholders |
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1,934 |
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(9,492 |
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(2,593 |
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2,435 |
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Net income (loss) attributable to noncontrolling interests |
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6 |
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(57 |
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(6 |
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— |
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2007 |
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2008 |
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2009 |
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2010 |
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(U.S. dollars in thousands, except share data and per
share data) |
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Pro forma income (loss) from continuing operations as if the offering had been completed on January 1, 2009 (unaudited)(1) |
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54 |
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3,827 |
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Earnings (loss) per share: |
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From continuing operations—basic and diluted |
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— |
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(0.01 |
) |
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(0.01 |
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0.01 |
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From discontinued operations—basic and diluted |
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— |
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(0.02 |
) |
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— |
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(0.01 |
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Earnings (loss) per share—basic and diluted |
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0.01 |
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(0.03 |
) |
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(0.01 |
) |
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— |
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Dividend declared per share |
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— |
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— |
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— |
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0.06 |
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Weighted average number of ordinary shares in computing: |
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Earnings (loss) per share—basic and diluted |
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250,000,000 |
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250,000,000 |
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250,000,000 |
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250,000,000 |
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Pro forma earnings (loss) per share: |
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Basic and diluted on an as converted basis (unaudited) |
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— |
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— |
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Basic and diluted from continuing operations as if the offering had been completed on January 1, 2009 (unaudited)(2) |
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— |
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0.01 |
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Weighted average number of ordinary shares outstanding used in computation of: ORDINARY |
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Basic and diluted on an as converted basis (unaudited)(3) Ordinary |
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451,576,925 |
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451,576,925 |
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Pro Forma Valuation: using a price of $6.50 and new share count
- Trailing EPS (ADS): $0.05
- Trailing P/E: 130
