Rakon shares surge on Chinese deal
Shares in Rakon surged today after the Auckland firm said could quadruple its sales to Chinese technology manufacturer Huawei to US$56 million (NZ$70m) over the next five years.
Rakon, which makes crystal oscillators, will today sign a letter of intent with Huawei - which will use the components in its smartphones, smart devices and infrastructure programmes.
The shares rose 21.4 per cent to 51c on the NZX, their highest level in almost three months.
Rakon managing director Brent Robinson said it had been working closely with Huawei for some years.
''[This] recognises the greater scale and breadth of our product range, validates our commitment to a strategy of globalisation and our investment operations in China.''
The deal aims to quadruple Rakon's sales to Huawei by 2017.
Robinson said the assistance of Trade Minister Tim Groser, New Zealand Trade and Enterprise and a trade mission to China last year had helped seal the deal.
A Huawei spokesman said the deal was a ''significant partnership''.
''Rakon's success is testament to New Zealand's ability to produce world-leading products and innovations.''
The company's crystal oscillator components improve the precision of wireless signals, thereby increasing the accuracy, range and data transmission capabilities of wireless devices.
In May the company reported its second annual loss in three years, after it was hit by the strong New Zealand dollar, weak demand and rising costs.
It posted a net loss of $420,000 for the 12 months ending March 31, down from a net profit of $8.5m in the previous year.
Rakon shares were priced at 42 cents on the NZX early this morning.
- © Fairfax NZ News