Is there a future for e-Future? (EFUT)

Chinese supply-chain software company e-Future Information Technology (proposed ticker: EFUT) filed an F-1 with the SEC on June 21st in preparation for an IPO on the Nasdaq. The underwriters are Anderson & Strudwick. Details:

Offering Details:

• Sole underwriter: Anderson & Strudwick.
• Selling 1.0 - 1.5 million shares.
• Offering price: $6.00 per share.
• Post-offering: 2.5 - 3.0 million shares outstanding.
• Gross proceeds from the offering: $6.0 - $9.0 million.
• Proceeds to the company before expenses: $5.52 - $8.28 million.
• Use of proceeds: Salesforce development, marketing, research and development, and software product upgrades.

Company Description:

• Based in Beijing, China.
• Develops and sells enterprise resource planning software and provides one-stop solutions for distribution, retail and logistics businesses.
• Also provides related system integration and technical training services.
• Generates revenue from the sale of software, related hardware, maintenance and support contracts, and professional consulting, training and contract development services.
• Customers located throughout China.
• Customers: 30 out of the top 100 retailers and nine of the top 30 largest retailers in China.
• Manufacturing customers: Procter & Gamble China, Haier Group.
• Retailing customers include Suning Appliance, China’s second largest electronics chain.
• Competition: According to the company, while there is intense competition, the number of significant competitors for business in China is relatively limited.
• Competitive advantage: Company believes its solutions are collectively the broadest, most
  functional set of end-to-end software
  solutions available in the Chinese
  supply chain market.
• 185 employees (as of June 21, 2005) - 5 in management, 72 in technical support, 66 in r&d, 31 in sales and marketing, and 11 in finance and admin.
• Ownership: Management - 61%; C Tech Fund and e-millenium limited - 38.5%.
• Lock-up: ordinary shares locked-up for 90 days from the date of the prospectus (while the prospectus was filed on June 21, 2005, it is not yet dated for lock-up purposes.)
• Q1 2005 financial results were not provided.

FY 2004 Results (Company and subsidiary)
(all percentage changes and comparisons are year on year, unless stated otherwise, assumes conversion rate of RMB 8.2765 : US $1)

• Total revenue rose 22.0% to $4.2 million.
• Software revenue rose 92.1% to $3.2 million.
• Hardware revenue fell 54.3% to $621,161.
• Service fee income fell 5.2% to $412,390.
• Costs of sales fell 10.9% to $2.1 million.
• Gross margin rose from 32.2% to 50.5%.
• Total expenses rose 23.5% to $1.5 million.
  
• R&D expenses rose 171.8% to $171,562.
• Sales and distribution expenses rose 31.1% to $578,301.
  
• Operating income rose from a loss of $79,931 to a gain of $649,979.
  
• Operating margin of 15.5%.
• Net income rose from a loss of $82,254 to a gain of $610,533.
  
• Net margin of 14.6%.
• Basic EPS rose from a loss of $0.09 to a gain of $0.66.
• Diluted EPS rose from a loss of $0.09 to a gain of $0.41.

Balance Sheet:

• Cash and equivalents of $536,930 as of December 31, 2004.

Comment: Anderson Strudwick taking the company public???? Who????