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 Tracking 1243 U.S. listed China Stocks and Counting...
 Tracking 3065 U.S. Stocks and Counting...

 Isoftstone Holdings (NYSE:ISS)

Friday, November 26, 2010

iSoftStone Holdings Limited plans for Initial Public Offering

Company Snapshot:

A leading China-based IT services provider, serving both Greater China and Global clients

Industry Snapshot:

Businesses, both domestically in China and globally, are outsourcing a growing portion of their IT services and business processes to China-based IT services providers. China is one of the largest and fastest growing markets for IT services, and as shown in the charts below, China’s domestic IT services market and offshore software development market are expected to experience significant growth in the coming years.

 

     
LOGO   LOGO

There are several factors driving the overall growth of China’s IT services industry, including the rapid growth of China’s economy and domestic demand for IT services, the strategic importance of China as a target market for Global clients, strong offshore outsourcing demand, availability of low-cost qualified IT professionals with global and regional language skills, well-developed infrastructure in China and strong government support and spending.

Use Of proceeds:

We intend to use our net proceeds from this offering to repay outstanding bank borrowings, and use the remainder for other general corporate purposes, such as working capital, facilities acquisitions and funding potential acquisitions of, or investments in, other businesses or technologies that we believe will complement our current business and expansion strategies.

Underwriter:

  • UBS Investment Bank
  • J.P. Morgan
  • Morgan Stanley
  • Needham & Company, LLC

Proposed offering price: $11.00 and $13.00

Post IPO Share Calculation: (Using a 10 to 1 Ordinary to ADS conversion ratio).

  • 41,500,781: Pre IPO fully diluted share count used in EPS calculation, assuming all conversion features of preferred stock.
  •  10,833,334: Newly issued ADS shares ( 7,322,223 by the company + 3,511,111  by selling shareholders)
  •  1,666,666: Shares Issued to investor
  •   1,625,000: 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: 52,114,670

Financial Snapshot: December Year End

2009 vs. 2008

  • Revenues: $134. 4 million vs. $82.5 million
  • Non-GAAP Net Income: $13.4 million vs $4.7 million

Nine Months 2010 vs. 2009

  • Revenues: $135.2 million vs. $90.0 million
  • Non-GAAP Net Income. $10.7 million vs. $7.9 million

Pro Forma Valuation: using price of $12.00 and new share count

  • Trailing EPS (ADS): $0.31
  • Trailing P/E: 38.7