Camelot Information Systems (CIS), a China-based provider of enterprise application services and financial industry IT services, priced its IPO on July 20th, 2010, at $11 per share, which is the lower end of the expected range of $11-$13 per share, giving first day return of -3.2%.
Business Overview (from prospectus)
We are a leading domestic provider of enterprise application services and financial industry IT services in China, and we focus on enterprises operating in the Chinese market. According to IDC, a leading independent research firm, we are the largest domestic provider of SAP-based Enterprise Resource Planning services, or the ERP services in China as measured by 2009 revenue. Our flexible delivery model also allows us to provide IT services to other areas of the Asia-Pacific region, including Taiwan and Japan, which we believe further distinguishes us from our competitors.
Offering: 13.3 million shares at $11 per share. Net proceeds from this offering will be used for general corporate purposes.
Net revenues increased by 72.1% to US$35.3 million from US$20.5 million for the three months ended March 31, 2010, as compared to the three months ended March 31, 2009...Gross margin decreased from 28.2% for the three months ended March 31, 2009 to 24.8% for the three months ended March 31, 2010...Selling and marketing expenses increased from US$1.1 million for the three months ended March 31, 2009 to US$2.4 million for the three months ended March 31, 2010...Research and development costs decreased from US$635,000 for the three months ended March 31, 2009 to US$426,000 for the three months ended March 31, 2010...Net income increased to US$1.0 million for the three months ended March 31, 2010 from US$0.6 million for the same period in 2009...
The markets for IT services in China are highly competitive. The profiles and identities of our competitors may vary among our service lines and customers. In our enterprise application service business, we primarily compete with Chinese IT services firms, and we believe our competitors are Neusoft Corporation and Hand Enterprise Solutions Co., Ltd.. Competitors in our financial industry IT services business include Longtop Financial Technologies Limited (LFT) and Digital China Holdings Limited (GM:DCHIF). In addition, we may also compete with offshore IT service providers including firms based in India, such as Tata Consultancy Services (TCS) and Infosys Technologies Ltd. (INFY) as well as domestic offshore IT services providers such as VanceInfo Technologies Inc. (VIT)
We believe that the principal competitive factors in our business include our range of offerings, our level of technical expertise and industry knowledge, our responsiveness to customers’ business needs, the perceived value added and the cost of services. We believe we compete favorably with respect to these factors.