Shanghai HIUV New Materials Co Ltd, a Chinese manufacturer of new film materials, is on track for an initial public offering (IPO) on the Nasdaq-style STAR Market of the Shanghai Stock Exchange (SSE) to raise up to 1.469 billion yuan ($227.1 million).
HIUV, which is backed by domestic investors like Share Capital and Cowin Capital, plans to offer no more than 21.01 million shares at a price of 69.94 yuan ($10.8) apiece. Hong Kong-listed brokerage firm Haitong Securities is the principal underwriter for the deal.
Retail investors’ enthusiasm for HIUV’s listing, which resulted in an oversubscription of about 4500.7 times in the retail tranche, triggered a “claw-back mechanism” that resulted in the transfer of over 2 million shares to individual investors, according to the firm’s latest filing with the stock exchange on Thursday.
Shanghai-based HIUV will use a major part of the IPO proceeds to fund a project that targets an annual production capacity of 170 million square metres of specialised polymer film. The rest of the proceeds will be used for capital replenishment and repayment of bank loans, according to its prospectus.
Founded in September 2005, HIUV focuses on the R&D and production of medium-to-high-end new film materials used in the new energy and new materials sectors. Its main offerings are various kinds of photo-voltaic (PV) modules encapsulation materials, which are adopted by power generation groups and PV module manufacturers.
Its major corporate clients include Shanghai-listed PV products maker Trina Solar, and China’s Jinko Solar, which is one of the world’s largest solar panel manufacturers.
Along with the public share sale, the firm is seeking to explore opportunities in areas like semiconductor, electronics, mass consumption, building construction, and transportation.
According to the prospectus, HIUV’s revenue and net profit attributable to shareholders in H1 2020 stood at 554 million yuan ($85.7 million) and 56 million yuan ($8.7 million), respectively. Its revenue was 715 million yuan ($110.6 million) and 1.1 billion yuan ($170.1 million) in 2018 and 2019, respectively.
The firm’s actual controllers Li Min and Li Xiaoyu will remain controlling shareholders with a combined 38.03% stake, down 12.67%. After the IPO, its major shareholders will be realty developer Parkland Group (3.55%), Qianhai FOF (2.08%), and Cowin Capital ($1.81%).
Prior to the planned IPO, HIUV completed a series of equity investments from investors like domestic fund of funds (FOF) Qianhai FOF, private equity (PE) firm TFTR Investment, and Shenzhen-based Cowin Capital, according to Chinese business data platform Tianyancha. Its Series A to Series C rounds were closed between 2013 and 2015, with 41.92 million yuan ($6.5 million) in total financing.