Lately, the tech IPO market has been heating up. Oh, and Chinese IPOs have also been particularly strong. So when China Digital TV Holding (NYSE: STV) went public this week, it was inevitable it would do well. The company develops technologies and solutions for the Chinese digital television market.
On its first day of trading, China Digital's stock soared 75%. The underwriters included Morgan Stanley (NYSE: MS) and Credit Suisse (NYSE: CS).
Basically, China Digital develops things like smart cards (for set-top boxes) and sophisticated software for digital submissions. The company's market share is a whopping 44%.
Interestingly enough, the Chinese government is requiring that television operators move to digital systems by 2015. In other words, the growth should continue for China Digital.
From 2004 to 2006, the company's revenues spiked from $3.6 million to $30.4 million. In fact, the company posted a profit last year of $13 million.
However, China Digital's valuation is frothy, trading at more than 50 times trailing revenues. But, as seen with other Chinese IPOs, this actually seems kind of normal.
Also, if you want to check out other IPOs, click here.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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