Another Chinese Imaging Company Goes Public

Another Chinese Imaging Company Goes Public

China-based HG Technologies Co Ltd (HG) announced on June 23, 2020, it had gone public the same day with the issuing of stock shares and its listing CN300847 on the Shenzhen Stock Exchange (SHE).

It is listed as a Growth Enterprise Market (GEM) company which means it is not required to “fulfil the requirements of profitability or track record for the main board of the exchange.” The company initially shared its plans to go public in April 2019.

The company’s official prospectus reveals that 49.34 million new public shares were listed, which represents “not less than 25% of the total share capital on issuance.” Existing shareholders have not offered their shares publicly. The total share capital of existing and new shareholders is 197.34 million shares.

The initial stock price of 6.94 yuan/share (US$0.98186) was supported with online and offline purchases commencing June 23, 2020.

HG is based in Handan in Hebei Province and was an initial investment of Hebei Hanguang Industry Co., Ltd., CSIC Technology Investment & Development Co., Ltd. And the Institute of Chemistry of China Academy of Science. The company has been operating since 15 June 2000. The company specializes in developing and manufacturing OPC drums and toner for laser printers and copiers. Data reveals the income of toner and OPC drums is about 95% of its main business income.

According to the prospectus, HG’s revenue was RMB639.59 million (USD$90.4 million) in 2017. Revenue increased to RMB694.38 million (USD$98.14 million) in 2018 and RMB815.66 million (USD$115.29 million) in 2019.

Shenzhen Stock Exchange building

Net profits attributable to shareholders of the parent company were RMB49.45 million (USD$6.99 million), RMB 68.05 million (USD$9.62 million), and 77.2 million RMB (USD$ 10.91million) in 2017, 2018 and 2019 respectively.

After deducting non-recurring gains and losses, the net profits attributable to shareholders of the parent company were RMB39.77 million (USD$5.62 million), RMB 63.62 million (USD$8.99 million) and RMB 7.61 million (USD$1.08 million) respectively. During the reporting period, the issuer’s operating performance demonstrated stable growth.

Due to the COVID-19, the company’s operating performance in the first quarter of 2020 (Q1, 2020) declined compared with the same period last year. The operating performance in the first half of 2020 is expected to decline compared with the same period in 2019. Once COVID-19 is brought under control, operating performance for the remainder of 2020 is expected to remain stable.

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