PC Partner prepares to float on stock exchange?

Floating a company onto the stock exchange is a great way to evolve. Not only does it bring in a huge amount of investment, it also ensures that the original founders finally get paid for all their initial work. China is full of massive companies that are privately owned. One of the biggest and most famous of these privately held companies is PC Partner. KitGuru wonders if that might change soon. Pension fund managers prepare your wallets for the possibility that PC Partner might float.

Ask most people about PC Partner and they look at you, blank.

Mention brands like Sapphire and Zotac, then suddenly they know who you are talking about.

Let's just set the record straight. PC Partner is one of the biggest companies in the world.

ATI, nVidia and Intel have (or will be) touched by PC Partner in some way. PC Partner has been (and plans to continue) making everything for everyone.

So how big are they?

Well, let's take Sapphire as an example.  Sapphire is the biggest ATI/AMD partner by a country mile. Sapphire folk tend not to discuss company matters, but leave you with the impression that they sell around 40% of the Radeon chips in the world. KitGuru would estimate this number to be closer to 60% on many ocassions (by region or time of year). Now imagine those cards coming out of huge factories. But that's not all.

Zotac is one of nVidia's biggest partners and sole supplier for discrete nVidia graphics solutions into Acer – one of the world's biggest PC companies. Again, that's an awful lot of cards.

Before Intel decided to skip a Larrabee generation, PC Partner was rumoured to be one of the five companies entrusted with a licence to produce Intel graphic cards. That license might come in useful around the end of 2012.

Whichever way you look at it, the global output of PC Partner needs to be measured in the millions of units.

Maybe one of the key reasons for the company's success has been the way it has controlled costs at HQ, complimenting the core organisation with a highly flexible operation in China. PC Partner seems to employ around 600 people on its books in Hong Kong. However, through its Dongguan operations (mainland China), it is able to tap into a huge amount of manufacturing and assembly capability.

Rumours from KitGuru's contacts in the Far East indicate that production can run up to 200,000 cards a month, with revenues in the billions and profits in the hundreds of millions. That's a significant operation by anyone's standards.

Originally set up on 1st July 1997, Tony Wong, F.P Wong, Kan Leung and the late, great Boscoe Ho founded this massive company – starting with a management buy out of the PC division of V-Tech.  Boscoe Ho had maintained a close, life-long relationship with K.Y. Ho, ATI's founder, so it was completely natural for Sapphire to emerge as ATI's number one brand, assembled by PC Partner.

PC Partner still maintains close links with VTech at board level.

Globally, PC Partner is likely to see well over a billion dollars flow through its coffers each year. While it is highly profitable as an organisation, to go to the next level needs a massive push.

So what is the next level? Competing head to head with Asus, Gigabyte and MSI as a global brand which produces whatever the market demands.

That push, in the form of massive investment and access to a wider range of additional expertise, would come easily with an IPO – floating PC Partner on the stock exchange.

KitGuru wouldn't be surprised if PC Partner's board was giving this serious consideration right about now. Interesting stuff. So what might the future look like?

Assuming the partnerships with nVidia, ATI/AMD and Intel stay intact, PC Partner would be ideally placed to enter the market. With Sapphire's acquisition of the EVGA mainboard team and Zotac's experience in creating desirable MiniITX boards, PC Partner should be able to create the mainboard division it has so badly needed, for so long.

The launch of AMD Fusion will change the mainboard and low end graphics markets for good. News from the Far East indicates that Fusion will help AMD win a significant amount of mobile and low end contracts. PC Partner is going to want to ride that wave.

Timescale?

Well, in the latest of our ‘Flags of our Predictions', KitGuru will go out on a limb and say that PC Partner is likely to have evolved by the start of 2011 [Nice to see you fixed that earlier typo – Ed].

KitGuru says: While Asus has enjoyed mainstream brand success, it only really happened after the EeePC launched. MSI has never really enjoyed high street brand recognition, but is working on it. Gigabyte is probably only ‘known' because it has a real world meaning. We've no doubt that PC Partner launching onto the market would be successful, but will they change the name of  the company as it floats? Any thoughts?

Let us know what the new company name (if there is one) might be – either below or in the KitGuru forum. Also (if it actually happens), would you buy shares in an IPO like this?

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