New IPO News | Shougang Langze, dubbed the 'first carbon capture stock,' has launched its IPO subscription and is scheduled to list on June 3, with a minimum board lot subscription amount of HK$3,454.49

Futu News, May 26:$SHOUGANG LANZA (02553.HK)$The company announced that it will open its IPO subscription from May 26 to May 29, offering approximately 40 million shares globally, with listing expected on June 3.

Company Overview

The company operates in the carbon capture, utilization, and storage (CCUS) industry, primarily focusing on producing low-carbon products such as ethanol and microbial protein through carbon capture and utilization technologies, and providing integrated low-carbon solutions. Since its establishment in 2011, the company has been deeply engaged in the CCUS sector. According to Frost & Sullivan, it is the first company in the CCUS industry to commercialize and scale low-carbon product manufacturing using proven synthetic biology technology.

Financial Summary

For the fiscal years ended December 31, 2023, 2024, and 2025, the company’s revenue amounted to RMB 592.6 million, RMB 563.6 million, and RMB 521.7 million, respectively. Gross profit for the same periods was RMB 17.7 million, RMB -93.3 million, and RMB -127.7 million, resulting in gross margins of 3.0%, -16.6%, and -24.5%, respectively.

Use of Proceeds

Regarding the use of proceeds, Shougang Langze expects the net proceeds from the global offering to be approximately HK$533 million (assuming the over-allotment option is not exercised and based on the mid-point of the offering price range at HK$15.85). According to the prospectus, Shougang Langze intends to allocate the proceeds from the global offering to the following purposes:

Approximately 24.5% of the net proceeds are expected to be used over the next two years for the company’s Hebei Shoulang Phase II production facility. Approximately 24.8% of the net proceeds are expected to be used over the next two years to fund the construction and development of the company’s sustainable aviation fuel (SAF) production facility in Baotou, Inner Mongolia (the “SAF Facility”). Approximately 15.7% of the net proceeds are expected to be allocated over the next three years to research and development of microbial strains, production equipment and processes, and the company’s intelligent production management system to enhance production efficiency.

Approximately 14.6% of the net proceeds are expected to be used for technological upgrades at the company’s four production facilities (including upgrades to fermentation, pretreatment, and wastewater treatment processes). Approximately 9.7% of the net proceeds are expected to be used over the next three years for new product development. Approximately 4.3% of the net proceeds are expected to be invested in a gas company that will be established by local authorities in Ningxia Binze, which will centrally construct industrial off-gas transmission pipelines and related infrastructure. Approximately 6.4% of the net proceeds are expected to be used for general corporate purposes and working capital requirements.

Further reading:Shougang Langze Prospectus

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Editor/Vincent

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