NEW YORK (AP) – China Digital TV Holding Co. boosted the expected price range of its planned initial public offering, according to a regulatory filing Wednesday, in a sign of strong demand.
China Digital now expects its IPO to price between $13 and $15 per American Depositary Share. Previously, the company expected the offering to price between $11 and $13 per ADS.
The IPO totals 12 million American Depositary Shares, with each ADS representing one ordinary share, according to the company's filings with the Securities and Exchange Commission.
China Digital develops conditional access systems, which allow digital television network operators to control their subscribers' content and services, such as on-demand viewing and pay-per-channel programming.
Analysts have touted the huge growth potential of the company's Chinese market, spurred by a government-initiated transition from analog to digital television transmission.
In a research note, Renaissance Capital analysts said one uncertainty for the company is the degree to which Chinese television viewers will be willing to pay increased fees for digital television services.
Also, the analysts said China Digital is beginning to face pricing pressure for its smart cards and faces tough competition in winning contracts.
Assuming an offering price of $14 per ADS, China Digital TV now expects to raise about $153.3 million in net proceeds from the offering. The company plans to use the proceeds for research and development, sales and marketing, acquisitions and general corporate purposes.
Morgan Stanley and Credit Suisse Securities are serving as the IPO's lead underwriters. Piper Jaffray, CIBC World Markets and Needham & Co. are also underwriting the offering.
The company has also granted the underwriters the option to purchase up to an additional 1.8 million ADSs to cover any overallotments.
China Digital plans to list its shares on the New York Stock Exchange under the symbol “STV.”