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Don Dion (donalddion@gmail.com, @DRDInvestments) is the owner and Chief Investment Officer of DRD Investments, LLC, based in Naples, FL. and Williamstown, MA., a family office focused on managing a long/short hedge fund, real estate assets, venture capital, and various other financial assets for... More
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  • Upcoming Cowell E-Holdings IPO Benefits From Apple IPhone Growth 0 comments
    Nov 21, 2013 8:44 AM | about stocks: AAPL

    Among the many surprises in the global economy lately is the announcement of an IPO for a Korean company called Cowell e Holdings. The move will make it one of the few occurrences of an IPO from a joint private business and private equity company. The Cowell IPO will be listed on the Hong Kong stock exchange, although Cowell was previously listed on Korea's Kosdaq stock market. It was de-listed in 2011.

    Cowell e-Holdings, LTD.
    Cowell e-Holdings is registered in the Cayman Islands, managing a number of its companies that deal in optic electronics and manufacturing. These companies provide cameras, photocopying equipment and optical disk storage equipment to a number of companies including Foxconn Technology, LG Electronics and Samsung.

    In 2011, the private equity firm Hahn & Company acquired a 33.48 percent stake in Cowell with rights to purchase up to 50 percent of the company. Hahn is one of the newest of Korea's equity funds, and its aggressive inroads into the manufacturing sector bodes well for growth in this part of the world. Although increasing labor costs and shipping costs are threatening to rein in some industries in Asia, smartphone sales are expected to not only continue, but expand as more people become reliant on this technology for both business and personal use.

    Cowell and the iPhone
    Cowell e Holdings includes a number of companies that make the camera devices that are built into both the Samsung and Apple (NASDAQ:AAPL) phones. The company bolstered their position ahead of the IPO by securing contracts to provide cameras for both these smartphone providers. About 80 percent of Cowell's products go to Apple manufactured goods.

    The IPO
    The Cowell e-Holding IPO seeks to raise between $150 to 250 million. The company has not yet publicly named an advisor for the deal. Kwak Joung-hwan currently owns 50 percent of the company, with Hahn & Company owning the remainder. In 2011, Cowell posted $323 million in sales, providing $22 million in profit. Net profit this year is expected to increase to $51 million this year.

    Conclusion
    The Cowell IPO offers an interesting opportunity for investors who want to expand their holdings in the tech sector. The company's securing of contracts with both Apple and Samsung help to insulate it against any slowdown of production of Samsung products due to the two companies recent legal wrangling. The iPhone continues to be one of the hottest products on the market. Cowell's contribution to the Apple product will make this an exciting IPO.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Stocks: AAPL
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