IPO pricing | Connet Optics was subscribed 1.78 times, priced at HK$4.46 per share

Futu News, December 15, this Wednesday$CONANT OPTICAL (02276.HK)$ The announcement announced that the company will issue 121.6 million shares, priced at HK$4.46 per share, and 500 shares per lot. It is expected to go public on December 16.

During the public offering phase, Connett Optics received approximately 1.78 times more subscriptions. The final number of shares offered for sale was 12.16 million shares, accounting for 10% of the total number of shares offered (before any over-allotment rights were exercised). A total of 7,610 valid applications were received. The first-hand winning rate was 50.38%, and the two-hand subscription was stable.

Furthermore, the international offering was slightly oversubscribed. The final number of shares offered was approximately 109 million shares, equivalent to 90% of the total number of shares offered (before any overallotment rights were exercised). Futu Information collates relevant data in the following table:

The net proceeds of approximately HK$474 million will be used for the following purposes: about 46.4% will be used to increase the production capacity of the Shanghai production base and the Jiangsu production base; about 19.9% will be used to strengthen the company's R&D capabilities; about 10.3% will be used to increase the company's sales and marketing efforts; about 10.0% will be used for working capital and general corporate purposes; about 8.1% will be used for technology to improve production efficiency and processes; and about 5.3% will be used to repay outstanding bank loans. Such loans will mainly be used to allocate working capital to support business operations.

Conet Optics is a leading manufacturer of resin eyeglass lenses in China and has sold in over 80 countries during the record period, including but not limited to China, the United States, Japan, India, Australia, Thailand, Germany, and Brazil. According to Frost & Sullivan's report, although glass is a traditional lens material, resin lenses accounted for about 95% of the production value of eyeglass lenses in China in 2020 due to their high impact resistance and safety to wear.

According to Frost & Sullivan's report, in terms of output value, the resin eyeglass lens market in the Chinese eyeglass lens industry was 11.633 billion yuan in 2020 (RMB, same unit below).In 2020, in terms of resin eyeglass lens production, the company ranked first among resin lens manufacturers in China, with a market share of about 8.5%.Meanwhile, in 2020, the production of resin eyeglass lenses in China was 1,508.7 billion pieces. Based on the export value of resin eyeglass lenses in 2020, the company is the largest exporter in China, with a market share of about 7.3%.

In terms of financial overview, the company's revenue in 2018, 2019 and 2020 was $854 million, $1,059 million, and $1,093 million respectively. Revenue for the five months ended May 31, 2021 was 538 million yuan, an increase of about 48% over the previous year. Net profit from 2018 to 2020 was 78 million yuan, 112 million yuan, and 128 million yuan respectively. Net profit for the five months ended May 31, 2021 was 65 million yuan, an increase of about 99% over the previous year.

On the industry side, the total retail sales value of global resin eyeglass lenses increased from US$32.4 billion in 2015 to US$35.8 billion in 2020. The market size is expected to increase to US$46.5 billion, with a compound annual growth rate of 5.4% from 2020 to 2025.

Northern/Aurora

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