Unfazed by COVID-19, Chinese phone maker UTime files for $21.6m US IPO

Times Square is seen through the window of the Nasdaq MarketSite in New York, U.S., on Thursday, Aug. 4, 2016. Photographer: Victor J. Blue/Bloomberg

UTime, a Shenzhen-based manufacturer of low-cost mobile devices, has filed to raise up to $21.6 million in an initial public offering (IPO) in the US even as the market has gone dormant due to the coronavirus pandemic.

The amount specified is likely a placeholder as the preliminary filing is heavily redacted, with the company not indicating yet how many shares it plans to sell or at what range. It seeks to list on the Nasdaq under the symbol UTIME.

Founded in 2018, UTime is engaged in the design, development, production, sales, and brand operation of mobile phones, accessories, and related consumer electronics. It sells mobile phones and accessories mostly to customers in South America, Asia, and Africa.

It also provides manufacturing services to TCL Corp.’s TCL Communication Technology Holdings, Haier Electronics Group, a subsidiary of Haier Group Corporation, and Quality One Wireless LLC, a wireless distribution company based in Orlando, Florida.

The company has two in-house brands, “UTime”, its middle-to-high end label that targets middle-class consumers from emerging markets, and “Do”, its low- to mid-end brand for its grassroots consumers and price-sensitive customers in emerging markets.

The company said it plans to use the proceeds of the offering to establish a representative office in the US, expand sales and distribution channels, promote its online activities, launch 4G feature phones, and developing Bluetooth glasses, among others.

For the six months through September 2019, UTime reported net sales of $12.9 million, down 32 per cent year-over-year. It suffered losses of $1.4 million for the same period.

In the fiscal year ended March 2019, the mobile gadget maker scored sales of $35.4 million on losses of $1.6 million.

UTime admits in its filing that the outbreak of Covid-19 could materially and adversely affect its business. Its headquarters and factory are located in China, where the coronavirus originated. Its Guizhou factory, however, was allowed to reopen on February 14.

“We expect that the coronavirus could have a negative impact on our sales until production is fully running as normal,” UTime said. “Furthermore, our customers in China and elsewhere may reduce their future purchases from us if they are not able to complete the manufacture of their products due to the shortage of components from other suppliers.”

UTime joins a handful of other Chinese companies that are braving the pandemic to list in the US and other markets, including the domestic one. Among them is Naixue’s Tea, one of the biggest bubble tea chains in China, which was reported to be gearing up for a US IPO that could raise as much as $400 million.

Chinese online residential rental marketplace Danke Apartment is also understood to have set its terms for an IPO in the US to raise up to $201 million. The prospectus was initially filed in October 2019 but was updated on January 8. Another Chinese company, Lizhi, an interactive podcast platform for user-generated content, announced terms for an IPO in the US that could raise up to $61 million.

Meanwhile, back home, Shenzhen Bestek Technology, a manufacturer of smart controller and electronic products, raised $89 million in an IPO on the ChiNext board. SenseTime Group, a Chinese artificial intelligence startup, however, deferred its plan for an up to $750 million IPO in Hong Kong as the novel coronavirus outbreak batters markets.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.