IPO Pricing | Tongcheng New Materials lists today, with subscription oversubscribed by 3.39 times. The offer price is HK$44 per share, and the allocation rate for one lot (hand) is 100%.

Futu News, September 29:$RA MATERIALS (09607.HK)$Announced allocation results: the offer price is HK$44 per share, with a total issuance of 68.1187 million shares. Each lot consists of 100 shares, and the stock officially lists today.

During the public offering phase, Tongcheng New Materials was oversubscribed by 3.39 times. The final number of shares offered in the public tranche was 6.8119 million, accounting for approximately 10.00% of the total offer shares. A total of approximately 12,645 valid applications were received and accepted. The approximate percentage of shares allocated to one-lot applicants relative to the total applied shares was 100%.

In addition, the international placement tranche of Tongcheng New Materials was oversubscribed by 2.75 times. The final number of shares offered internationally was 61.3068 million shares, accounting for 90.00% of the total shares offered. Futu has compiled the relevant data in the table below:

Company Overview

The company is a comprehensive new materials supplier in China. It is primarily engaged in the R&D, production, marketing, sales, and distribution of new materials. During the track record period, the company's main business consisted of three segments: (i) rubber additives for tires and other chemical products; (ii) electronic materials; and (iii) fully biodegradable materials.

Positioned in the midstream of the industry chain, the company supplies functional resins, photoresists, and auxiliary chemical products to downstream industries such as tire, automotive, semiconductor, and display panel manufacturers. The company's main raw materials include phenol, formaldehyde, resins, and solvents. According to a Frost & Sullivan report, for the segment of rubber additives for tires and other chemical products, the company ranked first globally and in China in terms of sales revenue in the phenolic resin rubber additives market for tires in FY2025, with market shares of 41.4% and 45.9%, respectively.

Financial Overview

For FY2023, FY2024, FY2025, the first six months of 2025, and the first six months of 2026, the company's revenue was approximately RMB 2,937.3 million, RMB 3,263.4 million, RMB 3,420.6 million, RMB 1,650.5 million, and RMB 2,133.1 million, respectively. During these periods, the company recorded profits of RMB 404.1 million, RMB 534.2 million, RMB 577.3 million, RMB 358.3 million, and RMB 389.1 million, respectively.

Use of Proceeds

Regarding the use of proceeds, Tongcheng New Materials expects the net proceeds from the global offering to be approximately HK$2.706 billion (calculated based on an offer price of HK$44). According to the prospectus, Tongcheng New Materials intends to use the funds raised from the global offering for the following purposes:

Approximately 32.8% is expected to be used to enhance the company's R&D efficiency and capabilities; approximately 21.0% is expected to be used to upgrade and maintain the company's production facilities to increase capacity and product competitiveness; approximately 20.0% is expected to be used for strategic investments and/or acquisitions to achieve the company's long-term growth strategy; approximately 10.0% will be used to repay bank borrowings; approximately 6.2% is expected to be used to expand the company's overseas market presence and supply capabilities; and approximately 10.0% is expected to be used for working capital and general corporate purposes.

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Edited by Vincent

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