New IPO News | "Composite Material Trench Cover Manufacturer" Baogai New Materials has launched its IPO, scheduled to list on July 8, with a minimum subscription amount of HK$4,297.91 per lot

Futu News, June 29: $BAOGAI (08090.HK)$ The company announced that the IPO will be open for subscription from June 29 to July 3. It plans to globally offer approximately 14.47 million shares, with listing expected on July 8.

Company Overview

Established in 2009, Baogai New Materials has become a specialized manufacturer in China’s composite material trench cover industry, primarily producing composite trench covers designed to meet engineering and infrastructure demands. The company mainly uses resin-based composite materials embedded with glass fiber reinforcement, supplemented by structural elements such as steel rebar and cast iron, along with functional fillers like quartz sand and calcium carbonate.

Since inception, the company has prioritized technological innovation and superior quality, continuously enhancing the performance of its composite materials and refining its manufacturing processes. This focus has enabled the company to build an integrated system encompassing R&D, production management, and quality control, allowing it to meet stringent customer requirements and foster long-term client relationships.

Financial Summary

Baogai New Materials reported revenues of RMB 137.1 million, RMB 130.9 million, and RMB 143.6 million for the years ended December 31, 2023, 2024, and 2025, respectively. Its gross profit margins for the same periods were 38.2%, 37.5%, and 38.2%, respectively.

Source: Prospectus

Use of Proceeds

Regarding the use of proceeds, Baogai New Materials expects the net proceeds from the global offering to be approximately HK$84.3 million (calculated based on the midpoint of the offering price range at HK$7.33 per share). According to the prospectus, Baogai New Materials intends to allocate the proceeds from the global offering as follows:

Approximately 30% will be allocated to establishing a production line for resin-based composite products embedded with continuous carbon fiber; approximately 25% will be used to upgrade the company's existing production lines through automation technologies; approximately 15% will fund the expansion of the company’s R&D capabilities and enhance its R&D output, including the acquisition of advanced equipment and testing consumables; approximately 20.1% will be dedicated to further expanding the company's global sales and marketing channels to strengthen its global brand recognition, market penetration, and service efficiency; and approximately 9.9% will be used for general working capital.

Further reading:Baogai New Materials Prospectus

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Editor/Joe

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